Bookkeeping & Write-up

Beginning 1/1/11 you must use electronic funds transfer to make all federal tax deposits for employment tax's, corporation tax's and excise tax's. Forms 8109- and 8109-B Federal Tax Deposit Coupons can not be used after 12/31/10.
Generally electronic funds transfer are made using the EFTPS system. If you do not use EFTPS you can arrange for a trusted third party to make deposits on your behalf such as a payroll service or financial institution.
To enroll in EFTPS visit www.eftps.gov or call 1-800-555-4477 1-800-555-4477 . Speak to your local CPA about assisting you in signing up to the Federal Tax Payment System.

Unlike Social Security, there is no limit on wages or earned income for Medicare purposes. 1.45% is withheld on every dollar one makes. The employer is required to match this withheld amount.

Beginning 1/1/11 you must use electronic funds transfer to make all federal tax deposits for employment taxes, corporation tax's and excise taxes. Forms 8109- and 8109-B Federal Tax Deposit Coupons cannot be used after 12/31/10. Generally electronic funds transfers are made using the EFTPS system. If you do not use EFTPS you can arrange for a trusted third party to make deposits on your behalf such as a payroll service or financial institution. To enroll in EFTPS visit www.eftps.gov or call 1-800-555-4477 1-800-555-4477. Speak to your local CPA about assisting you in signing up to the Federal Tax Payment System.

If you’ve made the determination that the person you’re paying is an independent contractor, the first step is to have the contractor complete Form W-9 (PDF), Request for Taxpayer Identification Number and Certification. This form can be used to request the correct name and Taxpayer Identification Number, or TIN, of the worker. A TIN may be either a Social Security Number (SSN), or an Employer Identification Number (EIN). The W-9 (PDF) should be kept in your files for four years for future reference in case of any questions from the worker or the IRS. A penalty can be levied against you, the employer, for omission of this information on certain forms.

If the tax liability for a quarter is less than $2,500, it may be paid with the quarterly filing of Form 941. If the withholding is $2,500 or more, then it must be deposited on either a monthly or semi-monthly basis. The IRS will notify you each November as to whether you are a monthly or semi-monthly depositor. The IRS uses a one year look back period ending the preceding June 30th.

Generally, cash, petty cash, supplies, prepaid expenses, accounts and notes receivable, inventories and any other item that can be converted into cash within one year are classified as current assets. Cash is any medium of exchange that a bank will accept at face value. Notes Receivables are claims against debtors evidenced by a written promise to pay a certain sum of money at a definite time to the order of a specified person. Accounts receivable are claims against debtors which are less formal than note receivables that arise from sales of services or merchandise on account.

If the business has 1 federal Identification number then 1 Form 941 should be filed. Employers with multiple locations or divisions must file one Form 941 per quarter. Filing more than one will cause processing delays and unneeded correspondence.

Yes. There are two Internet verification options you can use to verify that your employee names and Social Security numbers match Social Security's records. You can: Verify up to 10 names and SSNs (per screen) online and receive immediate results. This option is ideal to verify new hires. Upload overnight files of up to 250,000 names and SSNs and usually receive results the next government business day. This option is ideal if you want to verify an entire payroll database or if you hire a large number of workers at a time. While the service is available to all employers and third-party submitters, it can only be used to verify current or former employees and only for wage reporting (Form W-2) purposes. Register to Use the Social Security Number Verification Service (SSNVS) - at www.ssa.gov/bso/bsowelcome.htm.

The Employer's Quarterly Federal Tax Return (Form 941) for the 1st period January-March is due by April 30. The Employer's Quarterly Federal Tax Return (Form 941) for the 2nd period April-June is due by July 31. The Employer's Quarterly Federal Tax Return (Form 941) for the 3rd period July-September is due by October 31. The Employer's Quarterly Federal Tax Return (Form 941) for the 4th period October- December is due by January 31st. If all the taxes were timely deposited for the current quarter, then the due date is extended 10 more days. If the 941 reports are not filed timely, there is a late filing penalty. There is also a penalty for late paying with associated interest on the balance due.