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Everything You Need to Know About Payroll Taxes

The lifeblood doctrine in taxes states that without taxes, the government cannot find means to pay for its expenses and that could lead to a complete dysfunction. There are people who are subject to tax liabilities because of their annual gross income and they are required to pay their taxes on a regular basis. The same is true for business owners and self employed individuals that are not properly monitored by taxing authorities. Yet everything is made easier for the employed individuals because instead of paying for their tax liabilities personally, they can simply pay for it through payroll taxes. Unlike requiring the employees to pay for the taxes on their own, payroll taces

For instance, the federal income tax is one of the types of taxes that can be automatically deducted from the pay of the employees. Now that the federal income tax is automatically deduced from the pay of the employees, the burden of paying they is not shifted to the employers. The social security tax of the individual is also among the types of tax liability that can be subject to payroll tax. Aside from all these tax liabilities, the unemployment tax, state income tax and the city and county income tax can also be deducted straight from the employee’s pay. But the tax deductions on the employee’s pay is not the same for all states because it may vary from one city to another depending on the state tax laws.

The medicare tax is also another type of tax liability that can be subject to payroll tax, along with other healthcare benefits for the employees. The good thing about his tax liability is that it provides for an instant healthcare insurance coverage that the employees can enjoy.

Thanks to payroll taxes, there is now an assurance that every employee is compliant with tax laws since they can now pay for their tax liabilities directly through their employers. The payroll taxes gives the power to manage the tax liabilities of the employees to the employers so it is easier to comply with the regular payment of taxes. If the employer fails to comply with such obligations, there is a penalty imposed so strict compliance is highly recommendable. That is why these days, most of the companies are already applying the payroll taxes for their employees so that it will be easier for them to comply with their tax liabilities. Upon the employment of the worker, there is a need to comply with the requirements and provide the forms that enable to companies to automatically deduct payroll taxes.

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