Video instructions and help with filling out and completing Why Form 944 Pr Employers

Instructions and Help about Why Form 944 Pr Employers

I'm going to have to try to get started right away and I don't know that we'll even be able to get finished but we're sure going to try I'm ready to cover section 13 - - in 13 1 we looked at how to record employees income taxes as a result of payroll so basically what we did was we took a payroll register and we recorded the affects of that check that was written to cover that payroll in essence all we could all we recorded was the employee taxes what the employer had deducted from employees checks in order to cover their federal taxes and any other taxes that they had or any other deductions that they had what we need to look at is today is employer payroll taxes not only to employees have some payroll taxes they have to pay employers must also pay some taxes related to payroll and they have for taxes that they have to pay first they have to match the employee's Social Security tax now again remember that the employees have a tax base of 87,000 so all they have to do is whatever the employees paid for in a fiscal period or in a payroll period the employer has to match it so that's not a tough one to compute all we have to do is take a look at what the employees paid and match it same thing from add up to the eighty-seven thousand dollar tax base once any employee hits the eighty-seven thousand dollar tax base then we don't calculate Social Security on them for the remainder of the that fiscal year the next year it starts all over again the next fiscal period it starts all over again which is typically a year running from January 1 to December 31 all right Medicare tax the employer must also match the employee so whatever the employees paid into Medicare the employer has to match it the third tax that employer has to pay is federal unemployment tax this helps fund unemployment you know if you get laid off and you need to draw unemployment that that money has to come from somewhere well it comes from this tax that employers have to pay this tax is calculated at 0.8 percent of the first seven thousand just up to seven thousand and what we're going to do an example when I said they also have to pay a state unemployment tax and again this helps fund unemployment and it is we're going to be using the rate 5.4 percent now realize that these tax rates are subject to change we're going to stick with these I think these are still the current tax rates but I may be wrong and again that's of the first 7,000 of each employees okay so those are the four taxes that an employer has to pay now I'm going to do a little sample oh by the way I want you to know that this is frequently abbreviated like that and this is frequently abbreviated like that and you will may hear me say Buddha and Sunnah because that's how I talk about it at my office when I pay our employees and I get ready to record this I'll say you know such-and-such dollars for food and such and such dollars for Sudha now remember realize though as the year advances and most of your employees are over $7,000 for their salary or annual pay you're not paying this any longer once everybody hits 7,000 you won't pay this anymore unless what that is the tax base this is the tax base for federal and state unemployment so once you know as we get further into a fiscal year and everybody's already earned 7,000 then I won't have to make this payment anymore unless I hire a new employee and then that that I will be paying them starting over again so unless you hire a new employee at some point in the year you're done paying later and suitum once everybody hits 7,000 all right so let's say that let's just do a fictional staff here and let's say I'm going to pick a short row that I employ Ethan and Anna and Ellie and Tristan oops and as of February 15th Ethan's total earnings were 7,200 as of February 15th 7,200 and Anna's total earnings I just she just came on was 1250 Ellis was 3700 and Tristan because she's my office manager earns a little bit more hers was 8,000 okay now let's say in the current in the current pets pay period Ethan's gross pay is six hundred and as gross pay is four hundred this is just this pay period Ellie's gross pay is five hundred and Tristan's is eight hundred the question is how much will I have to pay in futa and sudha for these this group of this pay period how much is subject to Buddha and Sudha so that's the question what amount is subject to unemployment taxes alright so let's look at even first what part of this 600 would be subject to food and Sudha none of it why he's already above the tax base what about Anna what part of this 400 400 would be subject to unemployment taxes all of it all 400 is subject to being taxed for unemployment she's only hit 1250 I have to pay on her until her income is seven thousand see Ethan's already hit seven thousand two hundred for the year okay I should have made this let's say February first as a February first you had earned seven thousand two hundred with today's pay which ended February 15th you earn six hundred but I don't have to pay any on this six hundred because he's already over the seven thousand dollar tax base she's not near no no no no no that's just the amount I'll use to calculate.