How to File Employer Federal Taxes
As an employer, it is your responsibility to deduct federal income tax, Medicare and Social Security taxes from your employees' paychecks, and then deposit these taxes in the bank periodically along with matching contributions for Medicare and Social Security. You must also fill out quarterly tax forms reconciling your payments with the amount you actually owe. In addition, you must complete an annual form detailing your federal unemployment tax obligations, and submit it with payment.
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Instructions
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Contact the Internal Revenue Service and tell them your business will be hiring employees. The IRS will send you an employer identification number (EIN), and create an account for you so you will receive federal employer tax forms periodically.
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Deduct federal income tax from your employees' paychecks using the federal income tax chart. Deduct Medicare taxes by calculating 1.45 percent of their gross wages for the payroll period. Calculate Social Security taxes by figuring 6.2 percent of each employees' gross wages for each payroll period. Set aside this amount of money, along with matching employer contributions for Social Security and Medicare. Deposit these amounts weekly, bi-weekly or monthly, according to the instructions you receive from the IRS.
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Fill out IRS form 941 quarterly, detailing your quarterly payroll, total federal tax deducted and the amount you were required to deposit for the quarter for Medicare and Social Security taxes. If your payroll does not meet the minimum to file quarterly, you should file an annual return instead. Include the amount that you actually deposited and calculate whether you overpaid, underpaid or paid precisely the right amount. If you underpaid, send in the amount you still owe with your tax form. If you overpaid, indicate on the form whether you would like the IRS to send you a refund or whether you'd prefer that the IRS credit your account toward future taxes. On the back of the form, break down your total tax obligation by the amount you owed each month.
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Fill out IRS form 940 at the end of each year. This form will ask you to calculate a percentage of each employee's wages up to $7,000 per year. Mail this form along with your payment by Jan. 31.
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If you prefer to file your taxes electronically, go to the irs.gov and follow the instructions to set up an account linking your employer identification number to your bank account or credit card so you can make payments. You should still deduct taxes from your employees' paychecks and deposit these sums into the bank each month.
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