The Payroll Book

CHAPTER 5Taxes

Alert

As of the editing of this book, the CARES Act (Coronavirus Aid, Relief, and Economic Security Act) (government acronyms are thought of first and then words found to match) is in discussion. There is a general outline but the details will take weeks, if not months, to sort out, even after it is passed. Forms and procedures will have to be created. Regulations will have to be written. The Bill itself will have to be interpreted and parsed before we know exactly what it means. Some parts of the law may be temporary and some may be permanent or made permanent later.

Please go to www.ThePayrollBook.com/resources/Covid-19 for all the details of the various legislative acts as they bear on payroll. We will be keeping this page up to date for all of our readers and interested parties.

Let's take up the subject of taxes. There are taxes that the employer withholds from the employee and pays to the appropriate governmental agency for the employee. There are taxes that the employer pays based on having and paying employees. This is also where it is important to understand the difference between employees and nonemployees (see Chapter 1).

We are going to explore all of the taxes that you as an employer and your employees may be subject to because of their employment and you paying them. We are not going to look at income taxes on your company, either federal, state, or local; excise taxes; sales taxes; or other numerous ways that businesses get taxed in this ...