Payroll Taxes: The Basics (Video)
This is the first in a series of videos on the topic of payroll taxes. Anyone with a business that has employees should find this series of videos to be useful and important. There will be many actionable items relating to payroll tax matters discussed throughout the series.
Payroll taxes are one of the more common reasons that businesses fail. We discuss why this is the case and, similarly, what business owners may do about it.
In this video, we begin with an overview of the magnitude of the payroll tax issue.
Then, we move on to a discussion of how payroll taxes work, including forms required. We also talk about the differences between FICA tax, Medicare tax and the withholding of employee income taxes, including their calculation.
Trust Fund Taxes
One of the critical areas covered in this video is the importance of Trust Fund taxes. These are the payroll taxes the employer holds in trust for the government. The penalties for the misappropriation of these funds are very high and can be imposed on the company, as well as the owners and certain key employees. This is known as “personal liability.”
Additionally, we go on to discuss the EFTPS system, which mandates the electronic payment of payroll taxes by almost all employers.
Finally, we conclude the video with a summary of three penalties. These can be imposed on the employer, in addition to the Trust Fund penalties already discussed.
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Founded by Gary Massey, Massey and Company is a boutique CPA firm in located in Atlanta, Georgia. We dedicate ourselves to serving the needs of small businesses and their owners.