Employment (Payroll) Taxes

If you are an employer, the IRS expects you to not only pay your business’s taxes but also withdraw the right amount of taxes for your employees. In this regard, as part of your payroll taxes, there are several relevant tax forms that you have to make sure you file to the IRS, otherwise, you risk being fined or penalized.

The most common form is W-2, which is also referred to as the wage and tax statement. This is the form that reports employees' annual wages and essentially covers the amount of taxes that must be withheld from their paycheck at the end of every month.

As such, every employer is legally required to send out these forms to each person that they happen to pay a salary or other form of compensation. These forms must be filed by all employers on or before Jan. 31 each year. This provides each employee sufficient time to file their income taxes before the April 15th deadline. The only exception to this form is that it does not cover any contracted or self-employed people. Employees may also be presented with a form W-4 when they are first hired. This form is used to provide the information your employer needs to keep track of your payroll, benefits, etc.

The W-4 form also informs the company of how much tax they need to withhold from one’s paycheck based on their marital status, number of dependents, and other factors. When you are getting ready to file your income taxes, you will need to take the information on your W-2 and input it into your 1040 individual tax form, which you can file by mail or electronically.