If your business has employees, then you are going to be incurring payroll and all the taxes associated with it.
– First have the employee fill-out a W-4. Once you determine his/her filing status and total allowance(s), use Publication 15 Circular E from the IRS (www.irs.gov) to determine the amount of income tax withholding that will be required.
– You must withhold social security or FICA taxes at a rate of 6.2% on the first $106,800 of wages (2010 cap amount). This amount is also due from the employer hence the total FICA tax rate is 12.4%.
– You must withhold medicare taxes of 1.45% and there is no compensation limit. This amount is also due from the employer hence the total medicare tax rate is 2.9%.
– The employer must pay Federal Unemployment on the first $7,000 of each employee’s wages. The rate is 6.2% but you can take a credit for the amount paid to the State.
– The employer must pay State Unemployment on the first $7,000 of each employee’s wages. The initial rate for new employers is 2.7% with a max rate of 5.4% depending on future claims. You can apply for a Florida UTC number via Form DR-1 at www.myflorida.com/dor.
– W-2’s must be mailed to recipient by January 31.
– 1096’s must be mailed to recipient by January 31.
– Form 940 Federal Unemployment filing due by January 31.
– W-3 and copies of W-2’s must be filed with Social Security by February 28.
– 1099 and copies of 1096’s must be filed with Social Security by February 28.
– Form 941 Employers Quarterly Payroll Report due by January 31, April 30, July 31 and October 31. If your tax liability is less than $2,500 per quarter, you can pay with the filing. If your tax liability per quarter is more than $2,500 but less than $50,000 annually, you must make monthly deposits. If your tax liability is more than $50,000 per year, you must deposit weekly or semi-weekly depending on your payroll cycle. You may pay either by Electronic Federal Tax Payment System or by using Form 8109 Federal Tax Deposit Coupons.
– Form UCT6 Florida Unemployment Compensation tax is due quarterly by January 31, April 30, July 31 and October 31.