CHAPTER 11::: Payroll Taxes, Deposits, and Reports
What is the purpose of form 941?
Form 941 shows income taxes withheld, social security and Medicare taxes due for the quarter, and tax deposits. The form is due on the last day of the month following the end of the quarter.
What is the purpose of form W-2?
Form W-2 provides information to enable the employees to complete their federal income tax return. Copies are given tho the employee and to the federal government (and other governmental units that levy an income tax).
What is Form W-3?
Form W-3 is sent to the Social Security Administration. It reports the total social security wages; total security and Medicare taxes withheld; total wages, tips, and other compensation; total employee income tax withheld; and other information.
Who pays the federal unemployment tax? and who pays the state unemployment tax?
The employers pay FUTA. Usually the employer pays SUTA, although a few states also levy SUTA on employees.
Merit rating system (375)
The same as Expiring Rating System
How does a business deposit federal payroll taxes?
Federal Reserve Bank or a commercial bank that is designated as a federal depository.
How the FUTA and SUTA taxes relate to each other?
A credit, with limits, is allowed against the federal tax for unemployment tax charged by the state.
Unemployment insurance program (375)
A program that provides unemployment compensation through to a tax levied on employers
Experience Rating System (375)
A system that rewards an employer for maintaining steady employment conditions by reducing the firm's state unemployment tax rate
Under the monthly deposit schedule rule, when must deposits for employee income tax and other withheld taxes be made?
By the 15th day of the following month.
How often do Employers usually record social security taxes in the accounting records?
Each payroll period
At the end of the year, the business has balance due for workers' compensation insurance. If no adjusting entry is made, will the amount of net income reported be correct? If not, how will it be wrong?
Expenses will be understand. Net income will be overstated.
Where is the federal unemployment taxes are reported?
In the Form 940
Is the ceiling on earnings subject to unemployment taxes larger than or smaller than the ceiling on earnings subject to the social security tax?
It is smaller ceiling.
How does a favorable experience rating affect the state unemployment tax rate?
It reduces the rate of SUTA tax that must actually be paid
Transmittal of Wage and Tax Statements, form W-3 (373)
Preprinted government form submitted with Form W-2 to the Social Security Administration
Wage and Tax Statement, Form W-2 (372)
Preprinted government form that contains information about an employee's earnings and tax withholdings for the year
Employer's Quarterly Federal Tax Return, Form 941 (368)
Preprinted government form used by the employer to report payroll tax information relating to social security, Medicare, and employee income tax withholding to the Internal Revenue Service
Employer's Annual Federal Unemployment Tax Return, Form 940 (377)
Preprinted government form used by the employer to report unemployment taxes for the calendar year
When do the State unemployment taxes are filed?
Quarterly
Withholding Statement (372)
See Wage and Tax Statement, form W-2
Which tax is payed equally by the employee and employer?
Social security tax
Why is it important for workers' compensation wages to be classified according to the type of work performed?
The amount of the premium depends on the type of work the employee performs.
Which factors determine the frequency of deposits of social security, Medicare, and income tax withholdings?
a. The amount of taxes reported in the lookback period b. Amount of taxes currently owed
How often does your business need to make payroll tax deposits?
Monthly
