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| *Loan,banking and credit>>>income tax |
What's the difference between "payroll" tax and corporate or income tax? |
...in other words, a C-corp will split the SS and medicare tax with the employee (within salary parameters)...what's the difference between that tax and income tax or is it all the same thing in the end? There are 5 different categories of taxes that all business must pay if they have Employees: Federal, Social Security, Medicare, State (Local), Federal Unemployment and State Unemployment. These are Payroll Taxes, also referred to as Income taxes because they are calculated from your Salary or Wages. Payroll Taxes consist of the employer portion of social security and medicare and federal and state unemployment taxes. Income tax and the employee portion of social security and medicare are paid by the employee, but withheld by the employer. These are called trust fund taxes because they are withheld from the employee and paid over to the taxing authority by the employer. The two types of taxes (withholding and payroll taxes) are combined and paid to the same agency, but a payroll tax return tells the government how to split the taxes. |
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