Accounting - Chapter 8 - Payroll Process (Cont.)
Terms in this set (18)
Payroll Tax Expense
the cost to employers that includes the total of the employers FICA OASDI, FICA Medicare, FUTA, and SUTA taxes.
Employer Identification Number (EIN)
A number assigned by the IRS that is used by employer when recording in pain payroll and income taxes
The form filled out my employer to get an EIN. The furnace and by the IRS, which assigns the number to the business.
Federal Insurance Contribution Act
part of the Social Security law that requires employees and employers to pay OASDI taxes and Medicare taxes.
Federal Unemployment Tax Act (FUTA)
- tax paid by employers to the federal government.
- current rate is 0.8% on the first $7000 of earnings for each employee after the normal SUTA text credit is applied.
- Once employees earn over $7,000, there is no FUTA paid.
a three month, 13 week time period. Four calendar quarters occur during the calendar year that runs from January 1 through December 31. The first quarter is January through March, the second April through June, the third is July through September, and the fourth is October through December.
Form 941, Employer's Quarterly Federal Tax Return
Report business will complete after the end of each calendar quarter indicating the total FICA (OASDI and Medicare) taxes owed plus the amount of F IT withheld from employees pay for the quarter. If federal tax deposits have been made correctly and on time, the total amount deposited should equal the amount due on Form 941. Any difference results in a payment due or a refund.
Form 941 Taxes
another term used to describe FIT, OASDI, and Medicare.
Businesses classified as a monthly depositor will make their payroll tax deposits only once each month for the amount of form 941 taxes due from the prior month.
Semi weekly depositor
businesses classified as a semi weekly depositor may have to make it's payroll tax deposits up twice in one week, depending on when payroll is paid.
a period of time used to determine whether a business should make its form 941 tax deposits on a monthly or semi weekly basis. The IRS defines this period as July 1 through June 30 of the year prior to the year in which Form 941 text deposits will be made.
a baking day is any day that the bank is open to the public for business.
Form 944, Employer's Annual Federal Tax Return
performance by the employers to report FICA taxes and F IT Texas. This version will be filed by January 31 following the end of the year and can be used by employers who owe $1000 or less for these taxes.
Form W-2, Wage and Tax Statement
form completed by the employer at the end of the calendar year to provide a summary of gross earnings and deductions to each employee. At least three copies going to the employee, one copy to the IRS, one copy to any state where employee income taxes have been withheld, one copy to the Social Security administration, and one copy into the records of that business
Form W-3, Transmittal of Income and Tax Statement
form completed by the employer to verify the number of W-2s and the amounts withheld as shown on them. This form is sent to the Social Security Administration data processing center along with copies of each employees W-2 forms.
Form 940, Employers Annual Federal Unemployment Tax Return
this form is used by employers at the end of the calendar year to report the amount of unemployment tax due for the year. If more than $500 is cumulatively owed the end of the quarter, it should be paid one month after the end of the quarter. Normally the report is due January 31 after the calendar year.
State Unemployment Tax Act (SUTA)
- tax usually paid only by employers to the state for employee unemployment insurance.
Worker's Compensation Insurance
- Insurance paid, in advance, to protect employees against loss due to accidental death or injury incurred during employment.
- Paid by employer