Paying the Payroll Tax Liabilities How and When Do Employers Pay Their

Paying the payroll tax liabilities how and when do

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Paying the Payroll Tax Liabilities How and When Do Employers Pay Their Liabilities? Payroll liabilities are paid at regular intervals. FICA and Federal Income Taxes A business makes one payment combining (1) social security and Medi- care taxes (for both employees and employer), and (2) employees federal income taxes withheld. It makes the payment at an authorized financial institution or Federal Reserve Bank. Most small businesses, like Roadrun- ner, make this payment monthly. It is due by the 15th day of the month following the payroll month. Payment for the month ending June 30 is due by July 15. Larger businesses make the payment every two weeks. Many small businesses prepare and send a Form 8109 with the check. The Form 8109, or Federal Tax Deposit Coupon, identifies the type of tax and the tax period. Notice the ovals on the right side of Form 8109 in Figure 13 3. The 941 oval indicates FICA and federal income taxes. The 2nd Quarter oval indicates the period ending June 30. The Electronic Federal Tax Payment System (EFTPS) is used by larger businesses to make deposits. Eventually even small businesses will use EFTPS. Figure 13 3 Federal Tax Deposit Coupon (Form 8109) for FICA and Federal Income Taxes Darken only one TAX PERIOD Darken only one TYPE OF TAX CENTS DOLLARS AMOUNT OF DEPOSIT (Do NOT type, please print.) EMPLOYER IDENTIFICATION NUMBER TAX YEAR MONTH 941 990- C 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter 943 720 IRS USE ONLY CT-1 945 1120 990-T 990- PF 1042 940 FOR BANK USE IN MICR ENCODING BANK NAME/ DATE STAMP 35 Federal Tax Deposit Coupon Form 8109 , . , ROADRUNNER DELIVERY SERVICE 155 GATEWAY BLVD. SACRAMENTO CA 94230 0 6 9 8 3 2 4 0 8 1 3 7 6 8 0 9 Roadrunner pays $908.76 payroll tax liabilities July 15 including $393.18 employees federal income taxes, $417.80 social security taxes, and $97.78 Medicare taxes (refer to ledger accounts in Figures 13 1 and 13 2 ). Business Transaction Main Idea Employers make tax deposits and send payroll reports to the government. Read to Learn how employers send payroll tax payments to the government. (p. 351) how employers report payroll information to the government. (p. 357) Key Terms Form 8109 Electronic Federal Tax Payment System (EFTPS) Form W-2 Form W-3 Form 941 Form 940 B EFORE Y OU READ Section 3 Tax Liability Payments and Tax Reports 351
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1. The accounts Employees Federal Income Tax Payable, Social Security Tax Payable, Medicare Tax Payable, and Cash in Bank are affected. 2. Employees Federal Income Tax Payable, Social Security Tax Payable, and Medicare Tax Payable are liability accounts. Cash in Bank is an asset account. 3. Employees Federal Income Tax Payable is decreased by $393.18; Social Security Tax Payable is decreased by $417.80; Medicare Tax Payable is decreased by $97.78; Cash in Bank is decreased by $908.76. 7. JOURNAL ENTRY 6. T ACCOUNTS 4. Decreases in liability accounts are recorded as debits. Debit Employees Federal Income Tax Payable for $393.18; Social Security Tax Payable for $417.80; Medicare Tax Payable for $97.78.
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  • Spring '15
  • sabaham
  • Accounting, Taxes, Taxation in the United States, Federal Insurance Contributions Act tax

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