1. CENTURY 21 ACCOUNTING © Thomson/South-Western LESSON 13-3 Reporting Withholding And Payroll Taxes

2. CENTURY 21 ACCOUNTING © Thomson/South-Western PROCESS Record Employee Payroll Taxes/Pay Wages (Lesson 1) Salary Expense Federal Income, Social Security, Medicare Record Employer Payroll Taxes (Lesson 2) Payroll Expense Social Security 6.2%, Medicare 1.45%, Federal Unemployment.8%, State Unemployment 5.4% Report Taxes to Government (not unemployment) Quarterly - Form 941 (quarterly) Yearly - W3 (employer) and W2 (employee)

3. CENTURY 21 ACCOUNTING © Thomson/South-Western REPORTING QUARTERLY 3 LESSON 13-3

4. CENTURY 21 ACCOUNTING © Thomson/South-Western FORM 941 – Quarterly Report of Payroll Employer’s Quarterly Federal Tax Return - FORM 941 Reports to the federal government: Total earnings of all employees Amount of employee taxes owed to the government Required quarterly Due before the last day of the month following the end of quarter Ex: End of first quarter is due when? End of quarter is March 31 4 LESSON 13-3 Before April 30

5. CENTURY 21 ACCOUNTING © Thomson/South-Western EMPLOYER’S QUARTERLY FEDERAL TAX RETURN (continued on next slide) 1 2

6. CENTURY 21 ACCOUNTING © Thomson/South-Western 6 LESSON 13-3 WTG pg. 382 & 331 1 DateTot. EarningsFed. Income Employee SS Employee Medicare Jan 31 $10,440.00 $731.00$647.28$151.38 Feb. 28 10,960.00 767.00 679.52 158.92 Mar. 31 12,400.00 868.00 768.80 179.80 Total taxes

7. CENTURY 21 ACCOUNTING © Thomson/South-Western 7 LESSON 13-3 EMPLOYER’S QUARTERLY FEDERAL TAX RETURN page 379 (continued from previous slide) WTG pg. 382 & 331 7537.40

8. CENTURY 21 ACCOUNTING © Thomson/South-Western REPORTING ANNUALLY 8 LESSON 13-3

9. CENTURY 21 ACCOUNTING © Thomson/South-Western W2 ANNUAL REPORT TO EMPLOYEES Sent to employees: W2: Employee Annual Report of Withholdings Employers must provide to employee Annually By January 31 Reports the previous year’s: Total Earnings Taxes Withheld Deductions Net Pay 9 LESSON 13-3

10. CENTURY 21 ACCOUNTING © Thomson/South-Western W2 CONTINUED Four Copies: One to employer One sent by employer to Social Security Administration Two to employee One copy for employee records One copy attached to tax forms and mailed to government Sent to IRS to determine tax payment/refund 10 LESSON 13-3

11. CENTURY 21 ACCOUNTING © Thomson/South-Western 11 LESSON 13-3 W2 – EMPLOYEE REPORT OF TAXES page 378 Source: Information pulled from Employee Earnings Record

12. CENTURY 21 ACCOUNTING © Thomson/South-Western W3 – ANNUAL REPORTING OF PAYROLL Sent to the Government: W3 – Transmittal of Wage and Tax Statements The W3 is the businesses form sent annually Sent by February 28 to Social Security Administration Previous year’s total earnings and payroll taxes for all employees A Copy of each employee’s W2 attached if under 250 employees Over 250, electronically submitted 12 LESSON 13-3

13. CENTURY 21 ACCOUNTING © Thomson/South-WesternLESSON 13-3 EMPLOYER ANNUAL REPORTING OF PAYROLL TAXES page 381