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| *Loan,banking and credit>>>income tax |
Does federal law require that social security medicare and federal income taxes be deducted from the gross pay |
Does federal law require that social security medicare and federal income taxes be deducted from the gross pay If you are an employee, then yes. If you a contract employee, then no, but the contract employee must pay the FICA taxes at the end of the year (after reducing his income by his/her expenses). The rate for self-employed is 2x the rate normally taken out because the employer normally pays half the FICA taxes. If you are the employer, you need to send in the FICA taxes quarterly (sometimes called 941 taxes after the form you need to file with the payments). Contact an accountant or bookkeeper who knows what they are doing. Also, be careful if you try to claim your employees are contract. They have to meet certain requirements to be considered contract labor. If the IRS says that the employees should have been treated as regular employees, you become liable for all the back taxes you should have been paying. Contract labor is usually for temporary, non-regular employment. Get some advise with more information about your specific situation before you hire people. yes it does. Yes if you are a wage earner receiving a W-2. If you are a independent contractor neither is deducted and you pay both on your own. Social security and medicare, yes, for employees. Federal income taxes - yes for employees, unless the employee's W-4 either is filed as exempt or has enough allowances that no withholding is due. Ding, ding, ding, ding, ding! Yes, it does! Bob, what prize to we have for our new contestant? Not only does the US federal law code demand the taxes be deducted, it goes to the trouble to elucidate penalties for those who try to evade, and in great detail. (I believe that employers can get away with not deducting anything from an employee let go after 72 hours or less.) |
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