PAYROLL - FEDERAL

FTD Form 8109 - Federal Tax Deposit Coupon - Withheld Income and FICA Taxes

How to Make Deposits - In general, you must deposit withheld income tax, and employer and employee FICA taxes, with an authorized financial institution or a Federal Reserve bank or branch. Include a Federal Tax Deposit Coupon (FTD) Form 8109 with each deposit. You may also register to pay via EFTPS (Electronic Federal Tax Payment System). This method allows you to make payments by phone transfer or online.

When Your Deposits Are Due - The amount of tax you owe determines the frequency of deposits. You owe these taxes when you pay the wages (or make the payments from which the taxes are withheld), not when your payroll period ends. You will be a monthly or semiweekly depositor, based on a “look-back” period from July to June. If you deposited more than $50,000 in payroll tax liabilities, you are a semi-weekly depositor; if you deposited $50,000 or less, you are a monthly depositor.

Monthly Depositors - All withholding taxes collected during a calendar month must be deposited by the 15th day of the following month. NOTE: Most new employers will be monthly depositors for the first year.

Semiweekly Depositors - Withholding taxes accumulated on Wednesday, Thursday and/or Friday must be deposited by the following Wednesday. Amounts accumulated on Saturday, Sunday, Monday and/or Tuesday are due the following Friday.

Two special exceptions:

$2,500 Rule - No deposits are required for employers who accumulate less than $2,500 of tax liability during a quarter. Pay taxes when filing the return at the end of the quarter.

$100,000 Rule - If the total accumulated tax reaches $100,000 or more on any day during a deposit period, it must be deposited by the next banking day.

IRS will send you an FTD Coupon Form 8109 Booklet. Use these coupons to make your payroll tax deposits, or register for EFTPS (Electronic Federal Tax Payment System). If you do not receive a supply of coupons or need more than the number sent, you can order more by calling or writing to the Internal Revenue Service.

FTD Form 8109 - Federal Tax Deposit of Unemployment Taxes

How to Make Deposits In general, you must deposit federal unemployment taxes with an authorized financial institution or a Federal Reserve Bank or branch, the same as above. Use the same coupon and complete the information regarding type of tax on the coupon submitted.

When Your Deposits are Due -

Less than $500 at the end of any quarter - If your total undeposited taxes are less than $100, you may carry the taxes over to the following quarter.

$500 or more at the end of a quarter - If at the end of any quarter your total undeposited taxes for the quarter are $100 or more, you must deposit the taxes within 30 days after the end of the quarter.

To calculate the amount of taxes you owe, multiply wages paid up to $7,000 per employee by 0.8% (.008).

Form 941 is used to report:

1. Income tax you withheld from wages, tips, pensions, annuities, supplemental unemployment compensation benefits, certain gambling winnings, and third party payment of sick pay.
   
2. Taxes under the Federal Insurance Contribution Act (FICA).

Who Must File - Employers who withhold income tax, FICA taxes, or both must file Form 941 quarterly.

When To File - File starting with the first quarter in which you are required to withhold income tax, or in which you pay wages subject to FICA tax.

Where To File:

Internal Revenue Service Center
Varies depending on state and whether making a payment with the form

After you file your first return, the IRS will send you a form every three months. If you don't have a form, get one from an IRS office well in advance of the due date.

Form 940 - Employer's Annual Federal Unemployment (FUTA) Tax Return

Use Form 940 for the annual reporting of tax under FUTA.

Who Must File – In general, every employer who paid wages of $1,500 or more in any calendar quarter during the year or had one or more employees for some part of a day in 20 different weeks must file. Include all regular, temporary, and part time employees.

Where To File:

Internal Revenue Service
Varies depending on state and whether making a payment with the form

Due Date - January 31

Form W-2 Wage and Tax Statement

All employers must prepare Forms W 2.

Prepare a Form W 2 for each of your employees to whom you paid wages subject to income tax or Social Security (FICA) tax.

By January 31, give copies of W 2 to each person who was your employee during the year.

File Forms W 2 with accompanying W 3 (Social Security Administration copy) by February 28.

Where to File See Form W 3.

Filers of at least 250 W 2 Forms must use magnetic media. There is a penalty for not filing on magnetic media unless you obtain a hardship waiver (Form 8508).

Form W-3 - Transmittal of Income and Tax Statements - Annual

Employers and other payers must file Form W-3 with copy A of Forms W-2.

Where To File:

Social Security Administration
Wilkes-Barre Data Operations Center
1150 E. Mountain Drive
Wilkes-Barre, PA 18769

Form W-4 - Employee Withholding Allowance Certificate

All employees are required to complete and sign this form and the employer is required to retain the completed form. You can get the most up to date form at www.irs.gov.

Form I-9 - Employment Eligibility

The employer must verify specific employee documents to confirm eligibility to work in the United States. Employer and employee must sign the form and the employer must retain it. You can get the most up to date form at www.uscis.gov.

Deed/OUI 15 Employer's Quarterly Contribution Report

This form is used to report quarterly payments for state unemployment taxes and is used to report the wages paid during the quarter by individual.

When to File – The forms are due January 31, April 30, July 31, and October 31 of each year, together with payment due, if any. The report must be filed even if no wages were paid.

Where To File:

State of Maryland
Dept. of Economic & Employment Development
Office of Unemployment Insurance
P.O. Box 17291
Baltimore, MD 21203-7291

Or file online - www.dllr.state.md.us

Form MW-506 - State Withholding Tax

Form MW-506 is used to file the withheld Maryland taxes.

When to File – You will usually file by the 15th day of the following month. The state will notify you of your status as a monthly or quarterly depositor.

Where To File:

Comptroller of the Treasury
Revenue Administration Division
P.O. Box 21297-0175
Baltimore, MD 21297-0175

Or pay online - www.marylandtaxes.com

Form MW-508 - Annual Return for Withholding Taxes

Form MW-508 is used to reconcile the total amount of Maryland's withholding taxes as reported on your Forms MW-506 with the amounts reported on Forms W 2.

When To File - February 28

Where To File:

Comptroller of the Treasury
Revenue Administration Division
Annapolis, MD 21411-0001

Form 1099 - INFORMATION RETURN

Every person engaged in a trade or business and making “payments in the course of a trade or business” must file Information Return Forms 1099. Payments made to corporations are exempt from the reporting requirements.

“Payments in the course of a trade or business” include payments for services totaling $600 or more to any person in a calendar year. Such payments are not subject to withholding tax and are not reported on withholding statement (W 2).

The return is required to be furnished to each person by January 31 of the year following the calendar year during which payment was made. A copy is also sent to the Internal Revenue Service and cross-checked with the recipient's tax return.

There are substantial penalties for failure to file information returns ($50 per 1099, up to $100,000 maximum, in most cases) and for failure to include the recipient's identification number ($50 per 1099).

Magnetic Media If you file at least 50 information returns, you must file on magnetic media. There is a penalty for not doing so unless you obtain a waiver for undue hardship.

Form 1096 is the transmittal sheet to be sent to the IRS with each type of Form 1099.

CORPORATION INCOME TAX RETURN - FEDERAL

Form 1120 - U. S. Corporation Income Tax Return

Domestic corporations, whether or not they have taxable income, must file Form 1120 by the 15th day of the 3rd month after fiscal year end (extensions of time to file are available, if requested on time.)

Payment of tax must be made to the bank with Form 8109.

FTD Form 8109 - Corporation Estimated Tax

A corporation must make an estimated federal tax payment on Form 8109 if it can expect income taxes to be $500 or more.

Form 1120S - U.S. Income Tax Return for an S Corporation

S Corporations must file Form 1120S by the 15th day of the third month after fiscal year end. Extensions are available if requested on time. The taxable income passes through to the shareholders' individual tax returns.

CORPORATION INCOME TAX - MARYLAND

Maryland Form 500 - Corporation Income Tax Return

A corporation having Maryland income must file Form 500 by the 15th day of the third month after fiscal year end. Extensions are available if requested on time.

Where to File:

Comptroller of the Treasury
Revenue Administration Division
Annapolis, MD 21411-0001
301-974-3981

Estimated Payments - Corporations are required to make quarterly estimates on Form 500D or 500 DEP on or before the 15th day of the 4th, 6th, 9th and 12th months after the close of the tax year if income tax can be expected to exceed $1000 for the year.

Maryland Form 510 - Pass Through Entity Income Tax Return

S Corporations having Maryland income must file Form 510 by the 15th day of the third month after fiscal year end. The taxable income passes through to the individual shareholders.

PARTNERSHIP TAX RETURNS - FEDERAL AND MARLYAND

Form 1065 - U. S. Partnership Return of Income

Every partnership and limited liability company engaged in a trade or business or having income from sources within the United States must file Form 1065. The return is due by the 15th day of the fourth month after year end. Extensions are available by filing Form 8736. No tax is due with this return. Partnership taxable income passes through to the individual partners and may be subject to self-employment tax.

Form 510 - Pass-Through Entity Income Tax Return

All Maryland partnerships and limited liability companies must file annually. The return is due on or before the 15th day of the fourth month after year end. Extensions are available by filing Form 510E. (Taxable income passes through to the individual partners.)

PROPRIETORSHIP TAXES

The net income or loss of a proprietorship is reported as part of the income tax return (Form 1040 and MD 502) of the business owner. The income and expenses of the business are reported on Schedule C “Profit or Loss from a Business or Profession” and are taxable to the owner. The net income is subject to self-employment tax.