How to Pay Your Payroll Taxes Online?

Payroll taxes are paid by both employers and employees, though the exact rate depends on each employee's Form W-4. They also include FUTA taxes, which are paid only by employers and support funding for state unemployment insurance.

Payroll taxes are the employment taxes a business must deduct from an employee’s paycheck and submit to the federal government. These include Social Security Tax, Medicare Tax, federal unemployment tax (FUTA), and state income tax withholdings (if applicable). Essentially, payroll taxes are the contributions both employees and employers make to fund federal and state programs. The two main types of payroll taxes are Social Security and Medicare, which are based on a percentage of an employee’s gross wages. These payments are also considered a regressive tax because lower-income earners contribute more of their income to these taxes than higher-income earners do.

Other forms of payroll taxes are FUTA and state income tax withholdings, which vary from state to state (Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, and Washington have no income tax; New Hampshire and Oregon only tax dividends and interest). As a small business owner, you must be well-versed in your withholding tax responsibilities. You may choose to do these calculations yourself, enlist the help of a tax professional, or use a payroll service.

Payroll Taxes Online Payment
How to Pay Your Payroll Taxes Online? 1

Payroll Taxes Online Payment

There are a few different types of payroll taxes, including income tax withholding, FICA taxes, and federal unemployment insurance (FUTA) taxes. Payroll taxes are figured based on an employee’s reported deductions on Form W-4. Employers then calculate how much to withhold from each paycheck. These calculations are made automatically for some employers, such as those using a third-party payroll service provider. The IRS and state tax agencies require that you file periodic returns and deposits for payroll taxes. You may also be required to keep records showing how you computed your tax liability. Failure to file or deposit taxes can result in fines and penalties. In general, you can avoid these penalties if you act in good faith and are not willfully disregarding your obligations.

The easiest way to pay payroll taxes online is to use the Electronic Federal Tax Payment System (EFTPS). To make a deposit, you need an EFTPS enrollment number, PIN, and password. Then you need a bank account and the amount of your payroll tax payment. Enter the information and click “Make a Payment.”

Once you have a registered online account, you will receive a notification once your tax setup is complete. Then you will be able to make e-payments from your bank account, debit or credit card, and schedule payments up to a year in advance. E-payment processing times vary by state. For example, the IRS processes e-payments directly from your bank account on your scheduled payment date. However, some states require you to submit the e-payment application three or five banking days before your payment date.

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