Payroll tax forms: A beginner’s guide for US employers

Managing payroll taxes can be a daunting task for employers. Whether you're a small business or a large company, staying compliant with tax regulations is essential to avoid fines, and ensure your people are being paid correctly.

In this article, we’ll walk you through the key payroll tax forms you need to be aware of, when to file them, and how you can streamline the process.

What are payroll tax forms?

Payroll tax forms are official documents that you must file with the Internal Revenue Service (IRS) and any relevant state tax authorities. These forms ensure that you are withholding the correct amount of federal, state, and local taxes from your employees’ paychecks, as well as contributing correctly to Social Security and Medicare.

To see a full breakdown of payroll tax requirements by state, check out our free US State Explorer tool.

What are the main US payroll tax forms?

The most common payroll tax forms that you need to be aware of are:

1. Form W-2 (Wage and Tax Statement)

Form W-2 is issued to every employee in the US. It shows how much they earned and how much was withheld in taxes over the course of the year. This form must be sent to employees and filed with the IRS by January 31 of the following year.

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2. Form W-4 (Employee’s Withholding Certificate)

New employees should fill out Form W-4 to let you know how much federal income tax to withhold from their paycheck. This form doesn’t need to be filed with the IRS, but it’s critical for determining the proper tax withholding.

What are the latest changes to Form W-4?

3. Form 941 (Employer’s Quarterly Federal Tax Return)

Form 941 is a quarterly form that reports the amount of income taxes, Social Security tax, and Medicare tax withheld from employees' paychecks, as well as the employer’s share of Social Security and Medicare taxes.

4. Form 940 (Employer’s Annual Federal Unemployment Tax Return)

As the employer, you must file Form 940 annually to report federal unemployment taxes (FUTA). It’s due by January 31 and covers unemployment compensation payments to workers.

5. Form I-9 (Employment Eligibility Verification)

Although not a tax form, Form I-9 is crucial for verifying that your employees are eligible to work in the US. You must retain I-9 forms for each employee as proof of compliance with immigration laws.

6. Form 1099-NEC (Non-employee Compensation)

If you work with independent contractors, you’ll need to issue them a Form 1099-NEC to report how much you paid them. This form must be filed with the IRS and provided to the contractor by January 31.

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Why does payroll tax compliance matter?

Filing payroll tax forms correctly and on time is crucial for staying compliant with federal and state tax laws. Employers who fail to meet deadlines or make mistakes on these forms may face penalties, including fines and interest charges.

Mistakes can also lead to unhappy employees, delayed tax refunds, and extra work to fix errors.

Managing payroll tax forms 

For many employers, payroll tax compliance can be overwhelming. You need to manage:

• Multiple deadlines. Different forms have different due dates, and missing one can lead to penalties.

• Frequent updates. Tax laws and regulations change, so employers must stay updated on new requirements.

• Manual processing. Handling payroll taxes manually can lead to errors, which may require time-consuming corrections.

• State variations. Each state has its own set of payroll tax rules and forms, which can add complexity for businesses with employees in multiple locations.

This is why it’s highly recommended to use an automated payroll platform like Remote, which can help you fill out and submit payroll tax forms accurately, efficiently, and on time. We also provide in-house, local guidance and advice, saving you time, money, and resources.

Payroll tax forms are an essential part of running a business in the US, but they don’t have to be a headache. By understanding the key forms and deadlines, you can stay compliant and avoid costly mistakes.

To learn more about how Remote Payroll can simplify the entire process, speak to one of our friendly experts today.

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