Payroll Taxes Simplified, Part II

About a month ago, I wrote a post called Payroll Taxes Simplified, Part I. That post defined terms needed to understand the “what” of payroll taxes.

This post will provide an overview of the tax schedule, the “when” of payroll taxes. As before, a disclaimer: I am not an accountant. This post does not replace professional accounting advice. I have merely “been there, done that.” Find your nearby friendly accountant to confirm all this information, to provide you with professional advice, and to provide you with necessary specifics.

Now that that’s out of the way, here is your basic calendar for filing and paying your payroll taxes:

Quarterly Taxes and Reports

• You have quarterly taxes. These are due every quarter (imagine that!). The first quarter runs January-March; those taxes are due in April. The second quarter runs April-June; those taxes are due in July. The third quarter runs July-September; those taxes are due in October. The fourth quarter runs October-December; those taxes are due in January (please note the pattern;)
• The employer (e.g. the small business) needs to pay the following quarterly taxes: FICA (employee deductions AND employer paid), Income Taxes (federal and state), and SUTA. FUTA taxes are paid quarterly IF they exceed $500.00; if not, you can pay these annually.
• On the federal level, you fill out and turn in Form 941. This form, which the IRS issues, is used to report FICA and Income taxes (remember: income taxes are those deducted from an employee’s paycheck). In addition to filling out the form, you will need to pay these taxes. The easiest way I have found is to set-up an online account through the Electronic Federal Tax Payment System, or EFTPS.
• On the state level, you will need to pay your SUTA taxes. How this is done varies from state to state. In Colorado, our Department of Labor and Employment conveniently sends me the form every quarter. When it arrives in the mail, I fill it out and pay it. Check with your state agency to determine how you need to pay your SUTA taxes.

Annual Taxes and Reports

• On a federal level, now you file your FUTA taxes (I put these under the “Annual” category because, if you are reading this, your business is likely small enough that you will not be paying more than $500.00 in FUTA taxes each quarter). Anyway, for your FUTA taxes, you will need to fill out Form 940, again issued by the IRS. You can mail in payment with your Form 940.
• If you have employees, you will need to send them a W-2 by January 31st for the previous year. They will need these for their individual taxes due April 15th. Make sure to send them all the copies they need and keep all the copies YOU need for your business.
• If you have employees, you will need to turn in a W-3 (which is basically a summary for the IRS of all your W-2s). The IRS’s copies of your W-3 and your employee’s W-2s are due February 28th.

Please note that Form 941 and the EFTPS payment system will take care of everything BUT your unemployment taxes, FUTA and SUTA.

Okay – hopefully that is written in plain-enough English to be understood by and helpful to most. Payroll taxes are really not that complicated. They just take a little time and some organization. If you have any other resources you use or tips you have learned, please share in the comment section!

P.S. Just this year, I tried, for the first time, a way to electronically file your W-2s and W-3s through the government. You can access it here. Although it was nice to file them electronically, there were issues with the process and I had to contact customer service a couple times.

Tagged as: employee, employer, payroll, Private Practice, taxes