What to Know About Withholding Taxes
TIP: You also may be responsible for paying worker's compensation insurance for your employees; many small companies are exempt, but visit the Small Business Administration Web site for state-by-state requirements for worker's compensation.
If support staff and personal assistants work as employees, you are responsible for withholding federal and state income taxes, withholding the employee's share of the FICA (Social Security and Medicare payments), and paying your portion of FICA.
- Ask each employee to fill out a W-4 form so that you can calculate withholding using Circular E, Employer's Tax Guide from the IRS.
- Deposit withholding and FICA contributions into a designated bank account on a regular schedule.
- Make regular payments to the appropriate federal and state agencies.
- Pay federal unemployment taxes; employees make no contribution.
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