Paying taxes is a key responsibility of owning a business harrysbarvenezia. While business owners need to be aware of several types of taxes, the biggest one is the Federal Insurance Contributions Act (FICA) tax. FICA taxes are paid by both employers and employees to cover Social Security and Medicare. Since this is such an important payroll tax, business owners need to know what exactly these taxes entail, how to calculate them and when to pay them.
FICA is the federal income tax that business owners are required to pay on their employees’ behalf game judi slot. They do that by withholding 10% to 37% of pay from workers’ paychecks. The employee’s income and filing status will determine how much the IRS gets in federal income taxes. In addition to the money they withhold from employee paychecks, employers are responsible for paying their own share of the tax.
FICA comprises three taxes: Social Security tax, Medicare tax (with an additional tax for high-income employees), and Federal Unemployment Tax Act (FUTA) tax.
judi slot online, daftar situs judi slot online terpercaya, game slot online, situs judi slot online, daftar situs judi slot online terpercaya 2020, situs slot online terbaik, casino slot online 888, situs slot online indonesia, nama nama situs judi slot online, situs slot online, online slot, daftar slot online, link slot online, slot game online indonesia, slot online indonesia, game slot online indonesia, slot online, slot jackpot online, judi online slot, judi slot online indonesia, judi mesin slot online, judi slot online android, slot judi online, agen slot online, games slot online, situs judi online slot, permainan slot online, bandar judi slot online, slot 88 online, agen judi slot online, judi slot online terpercaya, main slot online, game judi slot online, link judi slot online, bermain slot online, slot online 2021, daftar situs judi slot online, slot online casino
Social Security tax: The Social Security tax, which is 12.4% of income, is split between the employee and employer. Business owners are required to withhold 6.2% from employees’ paychecks and match the remaining 6.2%. As of 2021, a maximum of $142,800 can be taxed to cover Social Security. This means that those who make more than that are only taxed for Social Security on the initial $142,800, not on anything more than that.
Medicare tax: The Medicare tax is 2.9%, which is also split between the employee and employer. The employer withholds 1.45% of their employees’ wages and pays 1.45%. There is no limit on the income that can be taxed for Medicare.
Additional Medicare tax: There is an additional 0.9% tax for high-income earners – those who make over $200,000 as a single filer, $250,000 as a married person filing jointly, or $125,000 as a married person filing separately. There is no employer match for this added tax.
FUTA: The Federal Unemployment Tax Act was created to fund the nation’s unemployment benefit programs. Employers are required to pay 6% of the first $7,000 of workers’ wages. Businesses that pay this tax fully and on time receive a 5.4% credit, which lowers their FUTA tax responsibility to 0.6%.