Primer: Employment Taxes

If you have employees on your payroll, your tax situation is significantly more complex. You'll have to keep track of payroll taxes, employee withholding, Social Security, Medicare, unemployment, disability, and worker's comp, to name a few. All of these require separate calculations and timelines for payment. These rules are very strict and complex, and if you're not in the payroll business, hire an accountant or a payroll service to keep yourself legal and punctual with all these payments.



If you have employees on your payroll, your tax situation is significantly more complex. You'll have to keep track of payroll taxes, employee withholding, Social Security, Medicare, unemployment, disability, and worker's comp, to name a few. All of these require separate calculations and timelines for payment. These rules are very strict and complex, and if you're not in the payroll business, hire an accountant or a payroll service to keep yourself legal and punctual with all these payments.

All employees must fill out a federal W-4 form and a Form I-9 from the Immigration and Naturalization Service. You should also check with your state's office of taxation to find out about state income tax, unemployment, and worker's compensation, as well as what forms, if any, need to be filed.

If you use independent contractors and pay them more than $600 per year, you must file a Form 1099 with the IRS and send one to the person you paid. You can get these forms from your accountant or from tax officials. The Form 1099 reports to the government that this person was paid as a non-employee. This gives you the right to deduct those payments as an expense and tells the IRS to look for that money as income on your non-employee's Schedule C form.

Your tax preparer should provide you with forms and envelopes for making your estimated payments, or you can order these forms directly from the IRS by calling 800-829-3676.

Regional Articles
- Primer: Employment Taxes Alabama
- Primer: Employment Taxes Alaska
- Primer: Employment Taxes Arizona
- Primer: Employment Taxes Arkansas
- Primer: Employment Taxes California
- Primer: Employment Taxes Colorado
- Primer: Employment Taxes Connecticut
- Primer: Employment Taxes DC
- Primer: Employment Taxes Delaware
- Primer: Employment Taxes Florida
- Primer: Employment Taxes Georgia
- Primer: Employment Taxes Hawaii
- Primer: Employment Taxes Idaho
- Primer: Employment Taxes Illinois
- Primer: Employment Taxes Indiana
- Primer: Employment Taxes Iowa
- Primer: Employment Taxes Kansas
- Primer: Employment Taxes Kentucky
- Primer: Employment Taxes Louisiana
- Primer: Employment Taxes Maine
- Primer: Employment Taxes Maryland
- Primer: Employment Taxes Massachusetts
- Primer: Employment Taxes Michigan
- Primer: Employment Taxes Minnesota
- Primer: Employment Taxes Mississippi
- Primer: Employment Taxes Missouri
- Primer: Employment Taxes Montana
- Primer: Employment Taxes Nebraska
- Primer: Employment Taxes Nevada
- Primer: Employment Taxes New Hampshire
- Primer: Employment Taxes New Jersey
- Primer: Employment Taxes New Mexico
- Primer: Employment Taxes New York
- Primer: Employment Taxes North Carolina
- Primer: Employment Taxes North Dakota
- Primer: Employment Taxes Ohio
- Primer: Employment Taxes Oklahoma
- Primer: Employment Taxes Oregon
- Primer: Employment Taxes Pennsylvania
- Primer: Employment Taxes Rhode Island
- Primer: Employment Taxes South Carolina
- Primer: Employment Taxes South Dakota
- Primer: Employment Taxes Tennessee
- Primer: Employment Taxes Texas
- Primer: Employment Taxes Utah
- Primer: Employment Taxes Vermont
- Primer: Employment Taxes Virginia
- Primer: Employment Taxes Washington
- Primer: Employment Taxes West Virginia
- Primer: Employment Taxes Wisconsin
- Primer: Employment Taxes Wyoming
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