2020 was a year of many changes to include the redesigned Form W-4 to figure employee withholdings. Each employee must complete a W-4 when hired. How you, the employer, determine the withholding tax for your employee is dependent on when you begin to pay them wages. Make the W-4 effective with the first pay period.
If you use a payroll service provided (PSP) to prepare W-2, W-3, and Wage and Tax Statements, you remain liable to tax obligations for employment taxes (see Revenue Procedure 2012-32).
Make sure you know that federal tax deposits and federal tax payments reported on Form 8655, filed by the employer, are the same as those reported on Forms 940 and 941 filed by the PSP agent.
The liability for withholdings and reporting withholdings stays with the employer. Understanding your tax liability is vital. Accolade Accounting keeps you aware of payroll tax requirements. That’s the Accolade Advantage!
Ask us about other Tax Code Advice.
Cheers!
JD Longino, CPA
