written by Connor O’Mealy<\/p>\n
Any business that has employees is required to withhold income taxes on payments to each employee. Each employee must fill out their Form W-4 and the Employee\u2019s Withholding Allowance Certificate, and then provide both of those documents to their employer. <\/p>\n
Employees can claim a personal exemption, and an exemption for a spouse or child, in order to determine the number of withholding allowances for the employee. The employer then uses the tables in the IRS publication Circular E of the Employer\u2019s Tax Guide to determine which withholding method to use and how much income tax to withhold from the employee for the year.<\/p>\n
The two common income tax withholding methods are:<\/strong><\/p>\n The Percentage Method<\/em> Wage Bracket Method<\/em> Employment taxes to pay attention to:<\/strong> If you have any question about calculating payroll taxes, please contact our office at 417-881-0145.<\/p>\n","protected":false},"excerpt":{"rendered":" written by Connor O’Mealy Any business that has employees is required to withhold income taxes on payments to each employee. Each employee must fill out their Form W-4 and the Employee\u2019s Withholding Allowance Certificate, and then provide both of those documents to their employer. Employees can claim a personal exemption, and an exemption for a […]<\/p>\n","protected":false},"author":9,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"categories":[31],"tags":[63,77,65,66,43,48],"acf":[],"yoast_head":"\n
\nThe employer selects one of eight tables based on how long the payroll periods are. If the employer does not use a payroll period, then the daily or miscellaneous table should be used. After determining the appropriate table, the employer determines the amount of wages that are to be used as a base calculation. This calculation is determined by subtracting the number of withholding allowances from the previous determined wages for the payroll period. The result is net wages subject to withholding. That amount is then used in the withholding tables to realize the withholding amount.<\/p>\n
\nFor each employee, the employer must determine the payroll period, wages paid during the period, withholding exemptions, and marital status. The wage brackets are then used to calculate the amount of income tax to be deducted and withheld by using gross wages. There is no exemption amount deduction with this method. The Wage Bracket Method typically produces similar results to the percentage method. This method can only be used to assess information in payroll periods that fall before the first quarterly payroll period.<\/p>\n
\nFederal Insurance Contributions Act (FICA or Social Security) and Federal Unemployment Tax Act (FUTA) taxes:<\/p>\n\n