As a business, completing payroll can be a hassle. Whether computed and distributed monthly, bi-weekly, or every week, there are a number of different factors to consider when calculating the correct pay. Regardless of if employees are paid hourly or on a set salary, there are still computations that must be managed in order to ensure the correct withholdings are taking place and that the business is responsible for their share of the taxes in addition to each individual check being deducted properly.
There are five essential deductions which should be made accordingly to every person receiving a check. Following are definitions of each that can be found on your check every pay period.
Federal Income Tax
The amount of tax withheld from your check largely depends on the number of allowances marked on your initial paperwork. Based on dependents and itemized deductions, the allowance number affects the amount of money being withheld from your check.
Social Security and Medicare Tax
Known collectively as FICA (Federal Insurance Contributions Act)
these deductions are used to fund both government programs of Social Security and Medicare. Each working individual is responsible for paying a portion of their check to run these services, plus the company itself has to make a contribution as well that is dependent on the amount of monies disbursed.
State Income Tax
Not only are federal taxes withheld from your paycheck but state taxes are also taken. The current Colorado rate for 2018 is 4.63 percent
but there are also withholding tables which can be utilized based on an employees number of allowances and wages earned.
In addition to federal and state taxes, some areas may also enforce a local (county, city level) tax on pay. These must also be deducted, plus any unemployment insurance as determined by the location of employment.
Court Ordered Child Support/Garnishment
Two other deductions are determined on a case by case basis for individual employees. Some may have child support payments which must be deducted from the paycheck and then submitted to the appropriate authority or a garnishment initiated by either a state or federal source.
Both instances are non-negotiable and must be completed accurately and in a timely manner to stay in regulation.
The experts at Bloch, Rothman, and Associates
are happy to help analyze your business and provide any assistance in determining payroll, from full service to as needed. Our associates can also help in determining individual tax implications, filing statuses, or assist you in deciding which deductions would be correctly applied in your specific situation and answer any questions you may have pertaining to other individual or business income taxes. We can also assist with a variety of bookkeeping options for your business. It is recommended for those who are selected for an audit, that they enlist the services of a professional tax service before they begin engaging with the IRS auditor, especially before they submit any information.
Continuing further, associates at Bloch, Rothman can analyze and compile data for all unique tax situations, along with finding resolutions to any issues or estate complications. All services provided can and will be completed in a timely manner, accounting for any restrictions or imposed tax deadlines. Whether you need a simple explanation on a random tax form, are in need of representation, or would like help in a variety of other services our tax experts are ready and willing to assist. Call 303-321-7160 or contact us
for your initial free no obligation consultation.