Government Taxation
As an employer, you have specific payroll responsibilities
required by government agencies. These agencies can be federal, state or local.
Some of these responsibilities include, but are not limited to, withholding
amounts from your employees' compensation to cover income tax, social security,
Medicare, and other payments. Reporting and depositing payroll taxes to the
appropriate agencies is vital to your business. Late or inaccurate deposits may
result in penalties and interest charges. Federal levies can reach as high as
100% plus interest.
Internal Revenue Service (IRS)
There are a number of withholdings, which must be deducted from employee
wages. Part of these withholdings must be matched by the employer. The amounts
of the withholdings have not changed in many years. However, changes in standard
deductions for income taxes can change on a quarterly basis. Federal
withholdings cover the Federal Insurance Contributions Act (FICA) and Federal
Income Tax (FIT).
These deductions have been collected since the following years:
- OASDI since 1935
- Medicare since 1965
- Federal Income Taxes since 1913 with the Revenue Act
(Cited from wikipedia which is non-conclusive)
State of Washington
Once a Master Business Application is filed, the state notifies business
owners about the following taxes which must be paid, collected on behalf of the
government, and must be self-reported by the business owner. Late fees and
penalties apply in all cases:
- Labor and Industries Tax, based on employee hours and varies by
industry and position
- Unemployment Security Tax, based on a percentage of wages paid to
employees IAW your rating
**Sales tax is listed since it is collectively paid
with B&O and sundry taxes with the Combined Excise Tax filing system.
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