What are Federal Payroll Taxes?
Welcome back! This is the first episode of a six-part series on Federal payroll taxes. In today’s episode we will identify and explain what makes up federal payroll taxes.
Today we will learn:
In today’s episode we will identify and explain what makes up federal payroll taxes.
Why do you need to know this?
- Because you become a trustee for the US government when you pay your employees.
- Because you are personally liable for the withholding, payment and reporting of the trust fund portion of payroll taxes.
- Because you cannot delegate your responsibilities for paying your federal taxes. You are still responsible even if you use a third party to process your payroll and pay your taxes.
The Federal payroll taxes are:
- Federal income tax (employee paid).
- Social security and Medicare tax. Also known together as FICA (employee and employer paid).
- Federal unemployment tax (employer paid).
- The social security system is a Ponzi scheme.
- The federal income tax resurfaced with the ratification of the 16th Amendment which gave birth to the Revenue Act of 1913.
- The Current Tax Payment Act of 1943 that collection of the tax was an employer responsibility.
- Social Security is also called Old Age, Survivor and Disability Insurance or “OASDI”. And medicare is also referred to as Hospital Insurance or “HI”.
- Total Compensation Statements, like this one from the Society for Human Resource Management, are a great tool for communicating to your employees just how much they earn.
- IRS Withholding Calculator
- THE 2015 ANNUAL REPORT OF THE BOARD OF TRUSTEES OF THE FEDERAL OLD-AGE AND SURVIVORS INSURANCE AND FEDERAL DISABILITY INSURANCE TRUST FUNDS
- America’s Spending Problem