Running a business with employees may require several other things worth considering in order to be successful. One of these things concerns taking care of tax responsibilities involving the employees.

As an employer running a company with a number of employees working for you would mean also carrying the responsibilities of taking care of their income taxes, according to the law and the prevailing regulations regarding taxation and running a business.

Employer Identification Number

One of the first things that a business owner should know before hiring employees is that he or she should get an Employer Identification Number. Also known as the Federal Tax Identification Number, it is used by the IRS specifically to identify a certain business entity.

Employment Taxes

Once you have applied and received your EIN, you may then be able to hire employees or workers for your business. An employee is generally someone that performs services for a business owner on a regular basis.

The business owner or employer also has the control over what and how things are done with regards to employee activity. And in the same way, the employer has to be responsible over several of the required taxes pertaining to his or her employees.

Tax Responsibilities

By running a business with employees, the employer must be responsible for several of the required federal, state and local taxes. This will include computing and deducting withholding taxes from the wages and salaries of employees. This will include preparing and filling up certain paperwork needed by the IRS for such taxes.

Another form of taxes that employers should be responsible of taking care of involve those that concern Social Security and Medicare.

These services pay for the benefits that employees and their families may receive under the Federal Insurance Contributions Act or FICA in exchange for employee contributions.

It is up to the employer to withhold part of the wages of employees and match the corresponding amount as tax contributions for Social Security and Medicare of the workers.

Another tax that employers should be responsible for is the federal unemployment tax. This form of tax is part of the federal and state program that provides unemployment compensation for those workers who unfortunately lose their jobs. This form of tax falls under the Federal Unemployment Tax Act.

The FUTA tax is reported and paid for separately from the withheld income tax as well as the Social Security and Medicare taxes of the employees. It is the employers who should shoulder this tax and should not be deducted or withheld from the wages or earnings of their employees.