Federal income taxes are such a common occurrence in present times it is easy to forget their relatively recent origin. It is also easy to forget that the withholding of these taxes fall under IRS regulations that are strict and non-yielding in many cases. Simply put, the employer either collects the amount due from the employee or pays their own portion and sends it directly to the IRS. But though it sounds simple and basic it is critical for the employer to withholding the taxes correctly based on several factors including:

  • The type of payroll frequency used by the employer
  • The information supplied on the employee’s Form W-4
  • The taxable wage base and rate in effect for OASDI or social security taxes
  • The rate in effect for Medicare tax
  • If the employee is subject to the Additional Medicare Tax
  • Status of the employees such as nonresident alien or expatriate
  • The wage base and rate in effect for federal unemployment insurance or FUTA

The penalties are severe for failing to comply with employment tax rules and procedures since the IRS imposes both civil and criminal penalties on employers. In addition to these penalties, employers also must pay interest on any underpayment of tax that is a result of noncompliance with these same regulations.

Then once the taxes are withheld and paid, they must be reported and reconciled. Which forms are used for the initial reporting and when are they due? Which forms are used to correct already submitted forms? These are critical questions that the payroll professional must have answers to right on the tip of their tongues. So, although we like to refer to this as basic payroll it is anything but basic. It is the foundation that supports both quarter-end and year-end as well as all other IRS compliance issues facing the payroll department.

The course begins with a quick overview of the federal tax system. From that point course will discuss federal income tax including using Form W-4 and supplemental tax rates. From there the course moves on to a discussion of FICA taxes. The course will then move to discussing the depositing and reporting of both FIT and FICA taxes. In closing out the course penalties for failure to comply with IRS regulations will be reviewed before finally moving on to FUTA taxes.

Course Key Concepts: Payroll, FICA, FUTA, FIT, IRS, semiweekly depositor, monthly depositor, social security, Medicare, EIN, and OASDI.

Learning Objectives
  • Recognize rules regarding paying and reporting FIT and FICA taxes.
  • Explore the payment and reporting of FUTA taxes.
  • Identify the requirements for deducting FICA taxes.
  • Explore the requirements for deducting federal income tax correctly.
Last updated/reviewed: Sep 07, 2023
4 Reviews (23 ratings)

Reviews

5
Anonymous Author
This is a good introductions to various forms and proceses especially if you are new to payroll.

5
Anonymous Author
Excellent overview of federal payroll taxes with extra time spent on the new W4s.

5
Member's Profile
Vicky is very knowledge. This course is a good introduction to payroll

5
Anonymous Author
Great refresher and very informative if just starting out in payroll.

Prerequisites
Course Complexity: Foundational
No advanced preparation or prerequisites are required for this course.
Education Provider Information
Company: Illumeo, Inc., 75 East Santa Clara St., Suite 1215, San Jose, CA 95113
Contact: For more information regarding this course, including complaint and cancellation policies, please contact our offices at (408) 400- 3993 or send an e-mail to .
Instructor for this course
Course Syllabus
INTRODUCTION AND OVERVIEW
  Introduction to Basic Payroll 101: Withholding, Depositing and Reporting Federal Taxes3:58
  Introduction to Federal Tax System6:20
  Federal Income Tax11:16
  Form W-423:54
  Supplemental Wages12:34
  FICA Taxes14:46
  Deposit Rules FIT and FICA12:16
  Reporting FIT and FICA2:24
  Penalties1:24
  FUTA Taxes5:26
CONTINUOUS PLAY
  Basic Payroll 101: Withholding, Depositing and Reporting Federal Taxes1:34:18
SUPPORTING MATERIAL
  Slides: Basic Payroll 101: Withholding, Depositing and Reporting Federal TaxesPDF
  Basic Payroll 101: Withholding, Depositing and Reporting Federal Taxes Glossary/IndexPDF
REVIEW AND TEST
  REVIEW QUESTIONSquiz
 FINAL EXAMexam