According to the law, employers are required to make federal payroll tax payments to the government. Employers are expected to file proper reporting and informational returns. Filing payroll taxes can be complex, and penalties of not filing can be really tough. So if a business does not file a pay roll tax due to its difficulty, it should expect severe penalties by the state.
Criteria for handling payroll properly
Properly handling payroll tax responsibilities involves making sure that:
- your federal and state taxes are paid and reported to the appropriate tax agencies
- you properly report income, amounts withheld, and amounts paid on behalf of employees and contractors
- you maintain the required federal and state records
Accurate and timely compliance is the key to avoiding payroll tax penalties!
Process of Filing the Payroll Taxes
Step1: The moment you hire a employee, get a federal employer identification number from the IRS if you do not already have one for your business. Also get state and local tax numbers as well.
Step 2: For federal payroll tax purposes, you will have both reporting and depositing obligations. Although these relate to the same liability, the tax returns and tax deposits are generally done separately:
- Federal tax deposits must be made on a periodic basis.
- Federal tax returns must be filed on a quarterly or annual basis.
Step 3: File the federal tax deposits electronically
Federal tax deposits must be made electronically, unless the small business exception applies.
How Tax help MD helps?
Professionals at My Tax help MD help you in filing your returns electronically. Our corporative staff will guide you through every step.