Small Business Payroll Tax Reporting in Raleigh

Opening a small business requires a lot of attention to detail and proper management in order to be successful. This is especially true when it comes time to pay taxes on income earned. Most business owners are prepared to make the necessary payments and can plan accordingly.

small business accounting raleighHowever, as a business grows, its tax requirements change. An often overlooked aspect of operating a business is paying employee taxes, or payroll taxes.

What are Payroll Taxes?

Payroll taxes are the Federally and State required withholdings every business owner must track based on wages paid to employees.

What Taxes are Withheld?

  • Federal Income Taxes
  • FICA – Social Security/Medicare
  • Unemployment Taxes – based on total gross payroll

Anytime you hire an employee, you are obligated to track and report the employees payroll tax.

Certain Exemptions Exist for Tax Withholding

Some employers are given a pass on payroll tax payments. Based on the nature of employer/employee relationship, these “industries” aren’t required to withhold or track wages.

Employers Allowed Exemption

  • Farming/Agriculture
  • Seasonal Employment
  • Household

What You Should Do for Payroll Tax Reporting

All business owners are required to track and withhold the correct tax amount from each employee’s paycheck. The withholding should be kept in a Federal Tax Deposit (FTD) account.

The federal government requires reporting several times per year from business owners.

Quarterly

Employee wages subject to tax withholding must be filed with the Employer’s Quarterly Federal Tax Return or Form 941.

Annual

Plan to file the Employer’s Annual Federal Unemployment Tax Return (FUTA) or Form 940 during your annual income tax filing period.

Payroll Deposit Schedule

Each business is required to pay based on a specific schedule. This means certain payroll tax amounts change the frequency of the required payments.

For example: The IRS will review a business’s gross tax payment to determine the schedule for deposit. If your business exceeds more than $50,000 for the year, then the payroll tax deposit becomes monthly.

This can change based on each year’s total income withholding. Knowing which schedule your business is required to pay is crucial to avoiding an audit.

State Taxes

North Carolina also requires withholding income tax.

Avoid Trouble with the IRS

The best way to prevent problems with the IRS is to work with an experienced small business accountant in Raleigh. The complex and ever changing tax laws can be a minefield for business owners. Avoid unwanted attention from the IRS by making sure your records and payments are accurate and on time.

Here are some additional payroll tax resources for business owners.

Contact a Raleigh Small Business Accountant for Payroll Support

Our accountants have over 28 years experience preparing payroll taxes for Raleigh small businesses. You can be sure your business is in great hands when you work with a top accounting professional.

Find out how our team can support your business by calling 919-420-0092 or completing the online contact form.