Section 3 Tax Liability Payments and Tax Reports

Section 3 Tax Liability Payments and Tax Reports

What You’ll Learn

How to pay payroll tax liabilities.

Which tax reports are prepared

and filed.

What You’ll Learn

How to pay payroll tax liabilities.

Which tax reports are prepared

and filed.

Why It’s Important

Business owners must pay their payroll

liabilities and file payroll tax reports

promptly and accurately.

Why It’s Important

Business owners must pay their payroll

liabilities and file payroll tax reports

promptly and accurately.

Section 3 Tax Liability Payments and Tax Reports (cont'd.)

Section 3 Tax Liability Payments and Tax Reports (cont'd.)

Key Terms Federal Tax Deposit Coupon Electronic Federal Tax Payment System Form 940 Form 941 Form W-2 Form W-3

Key Terms Federal Tax Deposit Coupon Electronic Federal Tax Payment System Form 940 Form 941 Form W-2 Form W-3

FICA and Federal Income Taxes

One payment is made for:

FICA and Federal Income Taxes

One payment is made for:

social security and Medicare taxes (both the employees’ and the employer’s shares) and

employees’ federal income taxes withheld.

The Federal Tax Deposit Coupon (Form 8109) is prepared and sent with the check. The form identifies the type of tax and the tax period.

social security and Medicare taxes (both the employees’ and the employer’s shares) and

employees’ federal income taxes withheld.

The Federal Tax Deposit Coupon (Form 8109) is prepared and sent with the check. The form identifies the type of tax and the tax period.

Section 3 Tax Liability Payments and Tax Reports (cont'd.)

Section 3 Tax Liability Payments and Tax Reports (cont'd.)

Payment of Federal Payroll Tax LiabilitiesPayment of Federal Payroll Tax Liabilities

Section 3 Tax Liability Payments and Tax Reports (cont'd.)

Section 3 Tax Liability Payments and Tax Reports (cont'd.)

JOURNAL ENTRY

Section 3 Tax Liability Payments and Tax Reports (cont'd.)

Section 3 Tax Liability Payments and Tax Reports (cont'd.)

JOURNAL ENTRY

Payment of State Income TaxesPayment of State Income Taxes

Section 3 Tax Liability Payments and Tax Reports (cont'd.)

Section 3 Tax Liability Payments and Tax Reports (cont'd.)

JOURNAL ENTRY

Payment of Federal Unemployment TaxesPayment of Federal Unemployment Taxes

Section 3 Tax Liability Payments and Tax Reports (cont'd.)

Section 3 Tax Liability Payments and Tax Reports (cont'd.)

JOURNAL ENTRY

Payment of State Unemployment TaxesPayment of State Unemployment Taxes

Payment of Other Payroll LiabilitiesPayment of Other Payroll LiabilitiesFor example: insurance premiums union dues charitable contributions

For example: insurance premiums union dues charitable contributions

Section 3 Tax Liability Payments and Tax Reports (cont'd.)

Section 3 Tax Liability Payments and Tax Reports (cont'd.)

JOURNAL ENTRY

Preparing Payroll Tax ReportsPreparing Payroll Tax Reports

Form W-2 summarizes an employee’s earnings and withholdings for the calendar year.

Form 940 is used to report the employer’s unemployment (state and federal) taxes.

Form 941 is the employer’s quarterly federal tax return on which accumulated amounts of FICA and federal income tax withheld from employees’ earnings, as well as FICA tax owned by the employer, are reported.

Form W-2 summarizes an employee’s earnings and withholdings for the calendar year.

Form 940 is used to report the employer’s unemployment (state and federal) taxes.

Form 941 is the employer’s quarterly federal tax return on which accumulated amounts of FICA and federal income tax withheld from employees’ earnings, as well as FICA tax owned by the employer, are reported.

Section 3 Tax Liability Payments and Tax Reports (cont'd.)

Section 3 Tax Liability Payments and Tax Reports (cont'd.)

Transmittal of Wage and Tax Statements

Form W-3 summarizes the information

contained

on the

employees’

Forms W-2.

Transmittal of Wage and Tax Statements

Form W-3 summarizes the information

contained

on the

employees’

Forms W-2.

Section 3 Tax Liability Payments and Tax Reports (cont'd.)

Section 3 Tax Liability Payments and Tax Reports (cont'd.)

Check Your UnderstandingCheck Your Understanding

What accounts are affected

when a business pays the federal

unemployment tax?

What accounts are affected

when a business pays the federal

unemployment tax?

Section 3 Tax Liability Payments and Tax Reports (cont'd.)

Section 3 Tax Liability Payments and Tax Reports (cont'd.)