CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 13-4 Paying Withholding and Payroll Taxes Original created by M.C. McLaughlin, Thomson/South-Western Modified by Deborah L. Burns, Johnston County Schools, West Johnston High School

CENTURY 21 ACCOUNTING © Thomson/South-Western 2 LESSON 13-4 PAYING THE LIABILITY FOR EMPLOYEE INCOME TAX, SOCIAL SECURITY TAX, AND MEDICARE TAX page 383  Two amounts determine how often deposits are made to the federal government  The amount of payroll taxes collected during the current deposit period &  The amount of payroll taxes owed during a prior 12 month period  The 12 month period that ends on June 30 th of the prior year is called the lookback period

CENTURY 21 ACCOUNTING © Thomson/South-Western 3 LESSON 13-4 FORM 8109, FEDERAL DEPOSIT COUPON page 384  Federal income, social security, & medicare taxes are deposited with the federal government using Form 8109  The type of tax and the quarter for which it is being deposited is marked on the coupon  Deposits can also be made using the Electronic Federal Tax Payment System (EFTPS)

CENTURY 21 ACCOUNTING © Thomson/South-Western 4 LESSON 13-4 JOURNALIZING PAYMENT OF LIABILITY FOR EMPLOYEE INCOME TAX, SOCIAL SECURITY TAX, AND MEDICARE TAX page 385 January 15. Paid cash for liability for employee income tax, $757.00; social security tax, $1,451.38; and Medicare tax, $339.42; total, $2, Check No Write the date. 2.Write the titles of the three accounts debited. 3.Write the check number. 4.Write the debit amounts. 5.Write the amount of the credit.

CENTURY 21 ACCOUNTING © Thomson/South-Western 5 LESSON 13-4 PAYING THE LIABILITY FOR FEDERAL UNEMPLOYMENT TAX page 386  Federal unemployment insurance is paid by the end of the month following each quarter if the liability amount is more than $100  FUTA deposits are made using Form 8109  The total of FUTA taxes paid during a calendar year is reported on Form 940

CENTURY 21 ACCOUNTING © Thomson/South-Western 6 LESSON 13-4 JOURNALIZING PAYMENT OF LIABILITY FOR FEDERAL UNEMPLOYMENT TAX page 387 January 31. Paid cash for federal unemployment tax liability for quarter ended December 31, $ Check No Write the date. 5. Write the amount of the credit to Cash. 4. Write the debit amount. 3. Write the check number. 2. Write the title of the account debited.

CENTURY 21 ACCOUNTING © Thomson/South-Western 7 LESSON 13-4 JOURNALIZING PAYMENT OF LIABILITY FOR STATE UNEMPLOYMENT TAX page 387 January 31. Paid cash for state unemployment tax liability for quarter ended December 31, $ Check No Date 5. Credit amount 4. Debit amount 3. Check number 2. Account debited 12345

CENTURY 21 ACCOUNTING © Thomson/South-Western 8 LESSON 13-4 TERMS REVIEW lookback period page 389