In cases involving the employment of an alien who is not a legal resident, the same thing applies. Applications for an EIN can be done online, through mail, by fax or with the use of the toll-free phone service. The process is free of charge. There are places on the Internet though where it is offered with a charge. Employers must be aware of such.
Employers have the right to withhold a portion of their workers' wages to serve as their federal income tax. The specific amount for such is specified in the income-tax withholding table set up and made available by the Internal Revenue Service. The details are modified every now and though the IRS itself makes an effort to inform every concerned party about such changes, the company must also hold itself responsible in getting up-to-date with the latest specifications from the said bureau.
Another employer tax responsibility is for the social security and Medicare taxes. These can be withheld from the worker's wages in the same way that the income tax is deducted. However, the employer has further responsibility to pay the same amount as the one withheld from the employee. The total amount is then submitted. Form W-4 can help determine the specific figures to be taken from both parties. Notice 1036 has the income tax withholding tables as well as the Social Security withholding rate and all other important information necessary to make the computations.
In addition to that, employer tax also includes the Federal Unemployment tax. This is completely different from the previous two taxes and must originate fully from the employer's fund. The workers have no participation in this responsibility and shall not experience any wage deduction for the purpose of this tax. Some parts of the country are categorized as credit reduction states. Employers operating in this area might be charged greater FUTA tax. The FUTA tax rate imposed on wages must be increased by these employers.
Employment tax, along with other depository taxes such as corporate and excise tax, must be deposited electronically. This is done through the Electronic Federal Tax Payment System. Form 8109 and Form 8109-B were used for this purpose prior to the electronic format but are not legit anymore. Furthermore, withheld federal income taxes should be reported by the employers as well as their share of the employment taxes, which is the collective term in reference to the Medicare and Social Security taxes for the workers.
Probably the greatest thing about the IRS system at the present time is how modern most of the stuff are. For filing taxes, the e-file is becoming a more and more popular option not just for the employees but for their employers as well. Generally, this innovation makes the whole process easier, more convenient and definitely faster. More so, since the data is entered and store electronically, human error is lessened, if not completely eliminated. As a result, there is a greater assurance of the whole data being accurate and returns are delivered in a more speedy manner. Businesses that are manned by people who are too busy to work on the taxes can also opt to hire service providers who specialize on the task.