Basic Payroll 101: Withholding, Depositing, and Reporting Federal Taxes

Learning Objectives

• To recognize rules regarding paying and reporting FIT and FICA taxes.
• To explore the payment and reporting of FUTA taxes.
• To identify the requirements for deducting FICA taxes.
• To explore the requirements for deducting federal income tax correctly.

Course Description

This course is valid up to December 31st, 2024 for CPP and FPC Professionals. It is advisable to complete this course before that to get the credit on time.

Federal income taxes are so common that it is easy to forget their relatively recent origin. It is also easy to forget that the withholding of these taxes falls under IRS regulations that are strict and non-yielding in many cases. Simply put, the employer either collects the amount due from the employee or pays their portion and sends it directly to the IRS.  

But though it sounds simple and basic the employer must withhold the taxes correctly based on several factors including:

• The type of payroll frequency used by the employer
• The information supplied on the employee’s Form W-4
• The taxable wage base and rate in effect for OASDI or social security taxes
• The rate in effect for Medicare tax
• If the employee is subject to the Additional Medicare Tax
• Status of the employees such as nonresident alien or expatriate
• The wage base and rate in effect for federal unemployment insurance or FUTA 

The penalties are severe for failing to comply with employment tax rules and procedures since the IRS imposes both civil and criminal penalties on employers.  In addition to these penalties, employers also must pay interest on any underpayment of tax resulting from noncompliance with these same regulations. 

Then once the taxes are withheld and paid, they must be reported and reconciled. Which forms are used for the initial reporting and when are they due?  Which forms are used to correct already submitted forms?  These are critical questions that the payroll professional must have answers to right on the tip of their tongues. So, although we like to refer to this as basic payroll it is anything but basic. It is the foundation that supports both quarter-end and year-end as well as all other IRS compliance issues facing the payroll department.    

In this CE Tax Course, we will cover an overview of the federal tax system. From that point, the course will discuss federal income tax including using Form W-4 and supplemental tax rates. From there the course moves on to a discussion of FICA taxes. The course will then move to discuss the depositing and reporting of both FIT and FICA taxes. 

Join this CPE Webinar it will review the penalties for failure to comply with IRS regulations.

Overview

• Intro to federal tax system

  6 mins
• Employer worksheets

  16 mins
• Form W-4

  23 mins
• Nonresident Aliens

  41 mins
• Have not withheld taxes

  57 mins
• Successor employer

  72 mins
• Reporting FIT & FICA

  86 mins
• Credit Reduction

  91 mins