Business taxes: Taxes for your employees

• Employee income taxes
  As an employer, you are obligated to withhold federal income taxes from employee wages and pay these to the IRS. How much you withhold depends on your payroll frequency, size of the wage payments, number of exemptions claimed by each employee and their marital status. You must issue each employee a W-4 form for determining withholding exemptions.

• Social Security, Medicare
  These taxes must be withheld from employee pay. The current rates are 6.2 percent for Social Security and 1.45 percent for Medicare. As an employer, you pay a matching amount -- for totals of 12.4 percent and 2.9 percent.

• Unemployment tax
  Most employers pay both federal and state unemployment tax under the Federal Unemployment Tax Act. The tax is due on the last day of the first month after each quarter ends, and can be paid by the electronic transfer of money or in an authorized financial institution using Form 8109, Federal Tax Deposit Coupon.

Forwarding the taxes
Withholding taxes are paid monthly or semiweekly, depending on the individual circumstances of the business. Large businesses are generally required to pay their tax within a day of each payroll. Details on your tax liabilities can be found in the IRS Tax Guide for Small Business and in The Employer's Tax Guide.

State taxes
You also may be required to withhold and forward state income taxes and other local taxes charged to employees, employers and businesses. Additional taxes and fees may be levied against firms in specific industries.

State and local taxes are beyond the scope of this article, so consult your individual tax adviser.