Payroll taxes can be a pain in your assets. But the law’s the law, and as a business owner, you’ll want to stay in the good graces of the IRS throughout 2019 and beyond.
Calculating payroll tax will require a bit more finesse for business owners this year. Those hoping to avoid the headache might consider hiring an outsourced payroll services provider who specializes in payroll and staffing services.
There are four main taxes that should appear on your employee’s paychecks:
- Federal income tax
- State income tax
- Medicare
- Social Security
The last two are known as FICA – Federal Insurance Contributions Act – taxes, and the revenue they generate goes to fund the respective social services.
Both received facelifts, of sorts, for 2019.
This year, the maximum amount of earnings subject to the Social Security Tax has increased from $128,400 to $132,900. The tax rate remains the same, 6.2%.
The Medicare tax, on the other hand, has no cap and for 2019 will be calculated at 1.45% of an employee’s gross pay, with an additional 0.9% being taxed for those earning more than $200,000.
Those changes, alone, will require your accounting department to make some significant adjustments. But Federal and state income taxes can also be tricky, and are determined by certain forms, such as the W-4, as well as the employee’s number of exemptions and filing status. Additionally, there are separate withholding tables at both the federal and state levels, which are updated annually.
Depending on your circumstances as a business owner, this can all result in a lot of paperwork and stress. And here’s the rub: if your company payroll taxes are not paid, are paid late, or are incorrectly processed – hefty penalties can ensue.
Each year, adjustments and amendments make tax laws a moving target. Companies that don’t do their best to stay current could be staring down some severe penalties and fines.
By enlisting the services of an outsourced payroll services provider, you can avoid Failure to Deposit charges and fines, and ensure that you remain compliant and copacetic in the eyes of the Internal Revenue Service.
Maslow Media Group can help you remain payroll tax compliant. Give us a call today or reach out to us online for a free quote.