Are you looking for accounting firms in Santa Rosa? If yes, you are here for the right reason. Maybe your business is on the verge of expansion. In such a growth scenario, it is important to take care of planning your tax. Even the slightest of tax errors can lead to a hefty penalty. We hope this article will offer you a good understanding of the payroll system and payroll taxes. Continue reading!

Few Responsibilities to Consider Before We Proceed

It’s a given that payroll taxes are indeed confusing topics for the uninitiated. Depending upon the type of business you are running, specific laws are subjected to change. Paying your employees is one of the most basic duties you should perform. Besides, you must pay equal attention to setting up a payroll system. It’s also necessary to comply with all the federal, state, and local laws related to payroll taxes.

Types of Employment Taxes

As an employer, here are the 5 basic employment taxes you should deal with:

  • Federal income tax: These taxes are imposed by the central government.
  • State income tax: Each state has its own tax requirements. Often, the local taxes are also imposed by local authorities.
  • FICA taxes: These are related to social security and Medicare. Since FICA taxes are to be deducted from all employee paychecks, it’s an important one to consider.
  • Federal and state unemployment taxes
  • State workers’ compensation funds

Apply for Your EIN

So, how do you put together a healthy payroll tax system for your office? In case you have employees working for you, you must know about the federal Employer ID Number (EIN). The EIN is a unique identifier for business houses. If you haven’t got one, apply for it straight away. Simply print out the SS-4 application form and fill it out. Then you can file it online.

Get your Employees Registered

Now you are required to visit your state’s revenue department and register yourself as an employer. Depending upon your state’s income tax policy, you might require your employees to follow a certain sign-up process for withholding.

Sign up for Federal Payment System

Since January 1st, 2011, the government made it mandatory for employers to sign up for EFTPS (Electronic Federal Tax Payment System) for making payroll tax deposits and filing payroll tax reports. Simply provide the required information about your business and bank account details.

Setting up a payroll tax system can be a daunting task to many. To help you out, you might ask Virtual Jeannie Bookkeeping Services Inc. for assisting you. You can reach them at 707-664-1425. Get your taxes sorted!