Forms Required When a Business Has Employees (2)

The Music Telegraph | Text 2021/02/03 [10:29]

Forms Required When a Business Has Employees (2)

The Music Telegraph| 입력 : 2021/02/03 [10:29]

 

© Pixabay



Forms Required When a Business Has Employees (2)

(In the United States)

 

Social Security and Medicare Taxes

Social Security and Medicare taxes are withheld from employee's wages each pay date.

 

2021 Social Security limit: $142,800

 

Social Security tax: 12.4%

- 6.2% for employee

- 6.2% for employer

 

Medicare tax: 2.9%

- 1.45% for employee

- 1.45% for employer

 

The employer's share of social security taxes of 6.2% is on wages up to $142,800 (in 2021). The Medicare amount of 1.45% is on all wages.

 

Total deposit (your share and the employee's share) is 15.30%.

 

 

Federal Unemployment Tax (FUTA)

Only the employers pays FUTA tax.

 

You are subject to FUTA tax in 2020 if you paid wages of $1500 or more in any calendar quarter in 2019 or 2020 OR if you had one or more employees for at least some part of a day in any 20 or more different weeks in 2019 or 20 or more different weeks in 2020.

 

The FUTA tax rate is 6.0%. The tax applies to the first $7000 you pay each employees as wages during the year. Generally you can take a credit against your FUTA Tax for amounts paid to state unemployement tax funds. This credit cannot be more than 5.4% of taxable wages. If you are entitled to the maximum amount, your FUTA tax rate after the credit is 0.6%.

 

 

 


[References]

 

1. Topic No. 751 Social Security and Medicare Withholding Rates, IRS, United States of America

https://www.irs.gov/taxtopics/tc751

 

2. Topic No. 759 Form 940 – Employer's Annual Federal Unemployment (FUTA) Tax Return – Filing and Deposit Requirements, IRS, United States of America

https://www.irs.gov/taxtopics/tc759

 

 

Comment
  • 도배방지 이미지


광고
Music Business (popular articles)
광고
광고
광고
광고
광고
광고
광고
광고