Frequently Asked Questions

Payroll Withholding Requirements

Q. What do IRS representatives agree is the quickest way to shut businesses down?
A. Failure to remit payroll taxes timely.

Q. Which types of employment taxes would the typical small business be concerned with?
A. Social Security taxes, Unemployment Taxes, Wage Withholding Taxes.

Q. What did the Tax Adjustment Act of 1966 add to income taxes?
A. Graduated withholding rates, which approximate the graduated income tax rates.

Q. What must almost every employer deduct from wages constructively paid to any employee?
A. Income tax and social security tax (FICA)

Q. What types of entities are subject to withholding rules?
A. Virtually all: individual, corporation, partnership, trust, estate, joint-stock company, association, syndicate, or other unincorporated organization, group, or entity that pays remuneration for services.

Q. Who is responsible for withholding and remitting the correct amounts?
A. The IRC places the responsibility on the employer.

Q. What should the employer do if the employee fails to furnish a signed W-4 Withholding Exemption Certificate?
A. Consider the employee to be single with zero exemptions.

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