You must withhold federal income, social security, and Medicare taxes required to be withheld from the salaries and wages of your employees. You are liable for the payment of these taxes to the federal government whether or not you collect them from your employees. If, for example, you withhold less than the correct tax from an employee's wages, you are still liable for the full amount. You must also pay the employer's share of social security and Medicare taxes.taxmap/pubs/p225-061.htm#en_us_publink100080179
Report withheld federal income tax and social security and Medicare taxes on taxmap/pubs/p225-061.htm#en_us_publink100080180
Form 943. Your 2008 Form 943 is due by February 2, 2009 (or February 10, 2009, if you made deposits on time in full payment of the taxes due for the year).
Generally, you must deposit both the employer and employee shares of social security and Medicare taxes and federal income tax withheld (minus any advance earned income credit payments) during the year. However, you may make payments with Form 943 instead of depositing them if you accumulate less than a $2,500 tax liability during the year (line 11 of Form 943) and you pay in full with a timely filed return.
For more information on deposit rules, see Publication 51 (Circular A).taxmap/pubs/p225-061.htm#en_us_publink100080181
You may have to deposit taxes using EFTPS. You must use EFTPS to make deposits of all depository tax liabilities (including social security, Medicare, withheld federal income, excise, and corporate income taxes) you incur in 2009 if you deposited more than $200,000 in federal depository taxes in 2007. If you first meet the $200,000 threshold in 2008, you must begin depositing using EFTPS in 2010. Once you meet the $200,000 threshold, you must continue to make deposits using EFTPS in later years even if subsequent deposits are less than the $200,000 threshold.
If you must use EFTPS but fail to do so, you may be subject to a 10% penalty.
If you do not have to use EFTPS because you did not meet the $200,000 threshold, you can voluntarily make deposits using EFTPS. If you are using EFTPS voluntarily, you will not be subject to the 10% penalty if you make a deposit using a paper coupon.
For information about EFTPS or to enroll in EFTPS, visit www.eftps.gov
or see Publication 966, The Secure Way to Pay Your Federal Taxes, or call 1-800-555-4477.
By January 31, you must furnish each employee a Form W-2 showing total wages for the previous year and total federal income tax and social security and Medicare taxes withheld. However, if an employee stops working for you and requests the form earlier, you must give it to the employee within 30 days of the later of the following dates.
- The date the employee requests the form.
- The date you make your final payment of wages to the employee.
If you are responsible for withholding, accounting for, depositing, or paying federal withholding taxes and willfully fail to do so, you can be held liable for a penalty equal to the withheld tax not paid. A responsible person can be an officer of a corporation, a partner, a sole proprietor, or an employee of any form of business. A trustee or agent with authority over the funds of the business can also be held responsible for the penalty.
Willfully means voluntarily, consciously, and intentionally. Paying other expenses of the business instead of the taxes due is acting willfully.taxmap/pubs/p225-061.htm#en_us_publink100080184
If you classify an employee as an independent contractor and your have no reasonable basis for doing so, you may be held liable for employment taxes for that worker. See Publication 15-A for more information.