Employers withhold taxes from their employees’ paychecks and hand this money over to the various tax agencies. These deductions include:
- Federal Income Tax: The rate of tax is based on the tables found in Publication 15.
- Social Security Tax: The tax rate for Social Security is 6.2 percent, and the Social Security base wage limit is $113,700.
- Medicare Tax: This tax is worth 1.45 percent.
- Additional Medicare Tax: This withholding is another 0.9 percent for employees earning more than $200,000 per year.
- State Income Tax: This varies from state to state. You can visit the Arizona Department of Revenue for more information.
- FUTA: Federal Unemployment Tax (FUTA) is reported and paid by employers separately from federal income tax, and employees do not have this taken out of their paychecks.
For further questions about Phoenix new business accounting, please contact Singer Tax & Accounting, PC today at (602) 482-8006.