With EFTPS, employers and taxpayers can pay their taxes by phone or online free of charge. This program has greatly reduced costs for employers while making it easier for individual taxpayers to get their taxes in on time. The employee identification number is a tax code for employers and is somewhat similar to the Social Security number given to individuals. This identification number is used by both the IRS and by individual state tax systems. These employees are paid a salary (not an hourly rate) and must perform executive, administrative or professional duties. They are not paid overtime rates for hours exceeding 40 in a week. Passed in 1938, the Fair Labor Standards Act (FLSA) instituted a number of regulations over working conditions designed to keep employees safe and fairly paid. This act mandates that all non-exempt employees working overtime (over 40 hours in a week) be paid time and a half. The FLSA also established the federal minimum wage and provided several mandates related to child labor. The individual regulations in FLSA may, under certain circumstances, be superseded by state and local laws. FMLAįirst passed in 1993, the Family Medical Leave Act (FMLA) allows employees to take leave from work in order to care for themselves or family members. When these employees return to work, their prior salary and health benefits must be fully restored. The Federal Insurance Contributions Act (FICA) mandates a payroll tax to be imposed on both employees and employers. This tax is then used to fund such programs as Social Security and Medicare. The amount an employee pays in payroll taxes over the course of his or her career may be indirectly related to the level of benefits for which he or she is eligible. Form 1099NECįorm 1099NEC refers to a set of tax forms used to report income outside of traditional employee wages. This form is most often used by freelancers and independent contractors. Unlike the Form W-2, Form 1099NEC does not require a company to withhold taxes or other deductions. The W-2 form is a lot like a 1099, but it is used to report wages earned for traditional employees. The W-2 also contains information pertaining to taxes withheld (such as Social Security) and compensation outside of wages (such as moving allowances). The W-3 form is completed by employers, and summarizes employee wages and tax information from the W-2 form.
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