Tax Strategies for the Small Business Owner: Reduce Your Taxes and Fatten Your Profits

Payroll Taxes

For every benefit you receive a tax is levied.

—Ralph Waldo Emerson

Once you have employees and payroll, you have the obligation to collect, file, and pay payroll taxes. This is true for all businesses with wages, from a small two-person concern to a nonprofit to the largest corporations.

There are three kinds of taxes you will collect: taxes on employees, taxes on both employees and employers, and taxes on employers. Personal income taxes are a tax paid solely by the employee, but an employer collects and remits to the IRS and state tax agencies. FICA (Social Security and Medicare withholdings) is a tax paid by both the employee ...