When it comes to paying taxes, we all feel like we are paying way more than we should. However, as a business owner, you are going to be responsible for even more taxes that need to be paid. It is vital that you keep these taxes straight too to ensure that you are meeting your responsibilities. Payroll and income taxes are two things that you need to understand since you, as the employer, are responsible for both of these mandatory withholdings. Mark Dicus & Company is here to talk about payroll taxes, incomes taxes and how they are different.
Understanding Income Taxes
Income taxes are held from an employee’s paycheck to cover their federal and state tax obligations. Most states are going to require employees pay income taxes, however, there are a few states that don’t require this. As an employer, it is your job to manage this withholding, but the employe is responsible for the money taken out. Every state handles income taxes a bit differently, so it is important that employees and employers understand the ins and outs of the tax laws for their state.
Understanding Payroll Taxes
While it might seem like payroll taxes and income taxes would be the same thing, there are some differences between the two. Payroll taxes is money that is taken out of an employee’s paycheck to cover the social programs of the government. This includes social security, Medicare and disability. The employer as well as the employee are going to pay these taxes together. Each will pay a portion so that no one is carrying the burden of these taxes on their own.
Importance of Finding Effective Strategies for Processing Payroll & Income Taxes
As you can imagine, when you’re dealing with all these withholdings, it is going to require that you do some paperwork to keep it all straight. You are going to need to do some categorization to ensure that the right amount of money is being taken out of each of the employee’s paychecks. It is vital that you are maintaining accurate records for this to happen. This is when it might come in handy to have someone helping you with your bookkeeping needs. If you aren’t keeping an accurate record of all your employee’s information, you can run into significant problems with your payroll. There are also going to be some deadlines that you must adhere to to avoid any fines and fees.
Tax Preparation, Filing, Planning & More in Salt Lake City, St. George, West Valley City, Provo, Orem, West Jordan & Greater Cedar City, Utah
If you are having a difficult time staying on top of your bookkeeping as a business owner, you can turn to Mark Dicus & Company to help you keep it all straight. We will make sure you are withholding the right amount from each of your employee’s paychecks and paying the right amount of taxes as well. You can count on us to help you keep an accurate record and reach success. Call us today!