The IRS, nearly every state tax agency, and even some cities require employers to withhold a certain amount from their employee’s paychecks to cover income tax, social security, and medicare obligations. These are payroll taxes, and it’s your responsibility, as a small business owner, to collect and send them in. The amount varies from state to state, and in some cases city to city, but there are three main steps to collection.
Everyone you hire fills out a W-4, which gives you some basic information like family size and other deductions. (more…)