Help With Withholding Taxes For Employees?

[Unregistered]

I'm hoping to get some help regarding my new situation. I'm real lost with all of the different information available.

I recently hired an assistant for my daycare. She will be working 30 hours per week and I'm paying her $12.50 per hour for a total of $375 every Friday. How much should I be withholding per week from her paychecks? Am I required to pay quarterly taxes for her with the money I withhold? Which forms am I specifically supposed to use?


Are their any programs that make this kind of stuff easier to manage?

Thank you in advance.

[TomCopeland]

Payroll taxes

You are required to withhold 7.65% of her pay for Social Security/Medicare taxes. You must pay another 7.65% out of your pocket and send this to the IRS quarterly using Form 941.

You must withhold federal and state income taxes from her pay. To determine the amount you must withhold, have the employee fill out IRS Form W-4. Then use IRS Publication Circular E to determine how much federal taxes to withhold. Contact your state department of revenue to get the state form and instructions about how much state income taxes to withhold. Also check with your state about how much to pay out of your pocket for state unemployment taxes.

At the end of the year you will owe federal unemployment taxes (Form 940).

You will also likely need to purchase workers compensation insurance. Ask your homeowners or business liability insurance agent if they can sell you a policy. Otherwise, contact your state workers compensation office.

There may be some software programs that can help with this, but I don't know about them. You can ask your tax preparer or an accountant to do all this paperwork. One national company that does this is Automated Data Processing (ADP).


Join me for a webinar “2012 Tax Changes: How to Avoid Mistakes on Your Tax Return” Tuesday, February 12th at 8:30-10:00pm Eastern Time. The cost is $25 (100% tax deductible!). To register: http://events.r20.constantcontact.co...&llr=yatrx4cab