Fundamentals of Taxation

Answer:

Income tax is the tax paid by individuals, household and business entities to the government on the earnings that they have. Payroll taxes are those portions of salary which is withheld by employer when paying salaries to employees and then this portion is submitted to government by employer on behalf of the employee. When payment is given to employee by the employer then they include many things in this payment like salaries, incentives, bones, commission, payment against fringe benefits which are taxable, etc.Federal Insurance Contribution Act taxes are commonly known as FICA taxes. There are two components of FICA taxes i.
e. social security taxes and medicare taxes. Social security taxes are collected to enable government to pay of old age, survivors and disability insurance, which is social, legal and administrative responsibility of the government. Medicare taxes are collected by government to pay for medical insurance of old age people and other individuals which come under specific categories.
FICA taxes are also withheld by the employers. FICA is paid by employee as well as employers. Social security taxes are 4.2 percent of the taxable salary up to the annual salary limit of $106,800, while employer has to pay social security tax of 6.2 percent up to the same higher limit of employee annual wage. Both employee and employer have to pay 1.45 percent of the employee's annual earning as medicare tax.

Answer:

The annual withholding will not materially differ regardless of the pay period of the taxpayer. As the payroll period gets shorter, tax withholding per check will decrease, yet the total for the year will remain roughly the same.

Answer:

Income tax is the tax paid by individuals, household and business entities to the government on the earnings that they have. Payroll taxes are those portions of salary which is withheld by employer when paying salaries to employees and then this portion is submitted to government by employer on behalf of the employee. When payment is given to employee by the employer then they include many things in this payment like salaries, incentives, bones, commission, payment against fringe benefits which are taxable, etc.The penalties for not paying or depositing payroll taxes on time by employer are as follows:
• When the late period is less than 5 days then penalty charged is 2 percent of the taxes due.• When the late period is less than or equal to 15 days but more than 5 days then penalty charged is 5 percent of the taxes due.• When the late period is more than 15 days then penalty charged is 10 percent of the taxes due.• If it was needed that taxes are to be paid electronically but it is not paid in that manner then there is 10 percent penalty.
• It taxes are deposited directly to IRS, or paid when return is submitted or paid to some unauthorized institution then there is 10 percent penalty imposed.• When payroll taxes are still due after 10 days of first notice issued by IRS regarding nonpayment then 15 percent penalty will be charged.