CENTURY 21 ACCOUNTING © Thomson/South-Western
LESSON 13-3LESSON 13-3
Reporting Withholding And Payroll Taxes
CENTURY 21 ACCOUNTING © Thomson/South-Western
PROCESSPROCESS
Record Employee Payroll Taxes/Pay Wages (Lesson 1) Salary Expense Federal Income, Social Security, Medicare
Record Employer Payroll Taxes (Lesson 2) Payroll Expense Social Security 6.2%, Medicare 1.45%, Federal
Unemployment .8%, State Unemployment 5.4%
Report Taxes to Government (not unemployment) Quarterly - Form 941 (quarterly) Yearly - W3 (employer) and W2 (employee)
CENTURY 21 ACCOUNTING © Thomson/South-Western
FORM 941 – Quarterly Report of PayrollFORM 941 – Quarterly Report of Payroll
Employer’s Quarterly Federal Tax Return - FORM 941 Reports to the federal government:
Total earnings of all employees Amount of employee taxes owed to the government
Required quarterly Due before the last day of the month following the end of quarter
Ex: End of first quarter is due when? End of quarter is March 31
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LESSON 13-3
Before April 30
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EMPLOYER’S QUARTERLY FEDERAL EMPLOYER’S QUARTERLY FEDERAL TAX RETURNTAX RETURN (continued on next slide)
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LESSON 13-3
WTG pg. 382
& 3311
Date Tot. Earnings Fed. Income Employee SS Employee Medicare
Jan 31 $10,440.00 $731.00 $647.28 $151.38
Feb. 28 10,960.00 767.00 679.52 158.92
Mar. 31 12,400.00 868.00 768.80 179.80
Total taxes
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LESSON 13-3
EMPLOYER’S QUARTERLY FEDERAL EMPLOYER’S QUARTERLY FEDERAL TAX RETURNTAX RETURN page 379(continued from previous slide)
WTG pg. 382
& 3317537.40
CENTURY 21 ACCOUNTING © Thomson/South-Western
W2 ANNUAL REPORT TO EMPLOYEES W2 ANNUAL REPORT TO EMPLOYEES
Sent to employees:
W2: Employee Annual Report of Withholdings Employers must provide to employee
Annually By January 31
Reports the previous year’s: Total Earnings Taxes Withheld Deductions Net Pay
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LESSON 13-3
CENTURY 21 ACCOUNTING © Thomson/South-Western
W2 CONTINUEDW2 CONTINUED
Four Copies: One to employer One sent by employer to Social Security Administration Two to employee
One copy for employee records One copy attached to tax forms and mailed to government
Sent to IRS to determine tax payment/refund
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LESSON 13-3
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LESSON 13-3
W2 – EMPLOYEE REPORT OF TAXESW2 – EMPLOYEE REPORT OF TAXES page 378
Source: Information pulled from Employee Earnings Record
CENTURY 21 ACCOUNTING © Thomson/South-Western
W3 – ANNUAL REPORTING OF PAYROLLW3 – ANNUAL REPORTING OF PAYROLL
Sent to the Government:
W3 – Transmittal of Wage and Tax Statements The W3 is the businesses form sent annually Sent by February 28 to Social Security Administration Previous year’s total earnings and payroll taxes for all
employees A Copy of each employee’s W2 attached if under 250
employees Over 250, electronically submitted
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LESSON 13-3