CENTURY 21 ACCOUNTING © Thomson/South-Western

LESSON 13-3LESSON 13-3

Reporting Withholding And Payroll Taxes

CENTURY 21 ACCOUNTING © Thomson/South-Western

PROCESSPROCESS

Record Employee Payroll Taxes/Pay Wages (Lesson 1) Salary Expense Federal Income, Social Security, Medicare

Record Employer Payroll Taxes (Lesson 2) Payroll Expense Social Security 6.2%, Medicare 1.45%, Federal

Unemployment .8%, State Unemployment 5.4%

Report Taxes to Government (not unemployment) Quarterly - Form 941 (quarterly) Yearly - W3 (employer) and W2 (employee)

CENTURY 21 ACCOUNTING © Thomson/South-Western

REPORTING QUARTERLYREPORTING QUARTERLY

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LESSON 13-3

CENTURY 21 ACCOUNTING © Thomson/South-Western

FORM 941 – Quarterly Report of PayrollFORM 941 – Quarterly Report of Payroll

Employer’s Quarterly Federal Tax Return - FORM 941 Reports to the federal government:

Total earnings of all employees Amount of employee taxes owed to the government

Required quarterly Due before the last day of the month following the end of quarter

Ex: End of first quarter is due when? End of quarter is March 31

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LESSON 13-3

Before April 30

CENTURY 21 ACCOUNTING © Thomson/South-Western

EMPLOYER’S QUARTERLY FEDERAL EMPLOYER’S QUARTERLY FEDERAL TAX RETURNTAX RETURN (continued on next slide)

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22               

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LESSON 13-3

                     

   

            

      

         

WTG pg. 382

& 3311

Date Tot. Earnings Fed. Income Employee SS Employee Medicare

Jan 31 $10,440.00 $731.00 $647.28 $151.38

Feb. 28 10,960.00 767.00 679.52 158.92

Mar. 31 12,400.00 868.00 768.80 179.80

Total taxes

CENTURY 21 ACCOUNTING © Thomson/South-Western

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LESSON 13-3

EMPLOYER’S QUARTERLY FEDERAL EMPLOYER’S QUARTERLY FEDERAL TAX RETURNTAX RETURN page 379(continued from previous slide)

       

WTG pg. 382

& 3317537.40

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REPORTING ANNUALLYREPORTING ANNUALLY

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LESSON 13-3

CENTURY 21 ACCOUNTING © Thomson/South-Western

W2 ANNUAL REPORT TO EMPLOYEES W2 ANNUAL REPORT TO EMPLOYEES

Sent to employees:

W2: Employee Annual Report of Withholdings Employers must provide to employee

Annually By January 31

Reports the previous year’s: Total Earnings Taxes Withheld Deductions Net Pay

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LESSON 13-3

CENTURY 21 ACCOUNTING © Thomson/South-Western

W2 CONTINUEDW2 CONTINUED

Four Copies: One to employer One sent by employer to Social Security Administration Two to employee

One copy for employee records One copy attached to tax forms and mailed to government

Sent to IRS to determine tax payment/refund

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LESSON 13-3

CENTURY 21 ACCOUNTING © Thomson/South-Western

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LESSON 13-3

W2 – EMPLOYEE REPORT OF TAXESW2 – EMPLOYEE REPORT OF TAXES page 378

Source: Information pulled from Employee Earnings Record

CENTURY 21 ACCOUNTING © Thomson/South-Western

W3 – ANNUAL REPORTING OF PAYROLLW3 – ANNUAL REPORTING OF PAYROLL

Sent to the Government:

W3 – Transmittal of Wage and Tax Statements The W3 is the businesses form sent annually Sent by February 28 to Social Security Administration Previous year’s total earnings and payroll taxes for all

employees A Copy of each employee’s W2 attached if under 250

employees Over 250, electronically submitted

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LESSON 13-3

CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 13-3

EMPLOYER ANNUAL REPORTING OF EMPLOYER ANNUAL REPORTING OF PAYROLL TAXESPAYROLL TAXES page 381