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Category Archives: Payroll Tax

Sizeable tax refund

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If you’ve recently received a sizeable tax refund, one thing you might want to think about doing with this sudden influx of cash is to invest in a new car. Newer cars have great gas mileage, amazing technologically advanced features, and safety improvements that can make an enormous difference if you get into a crash. If you’ve been driving an older car for a long time and frequently have to put money into repairs, maintenance, and replacement parts, it’s probably past time you got a new car. In the long run, it could end up saving you a lot of money. Some people hang on to their old cars for a long time because they just can’t stand the hassle and headache of shopping for a new car. If that describes you, take heart! Car shopping can be easier and less stressful than you ever imagined if you just do your homework, plan ahead, and approach it with confidence. Here are a few tips that can make your next car purchasing experience go a lot more smoothly.

1. Choose the car you want

Figure out what kind of car you need based on your driving habits, cargo-carrying needs, and family size. You can then use auto blogs, online car guides, and recommendations from friends and family to help you determine the right make and model for you. Narrowing it down to a few choices will make the shopping process a lot simpler. Many online sites have helpful comparison tools for pricing, specifications, and features. If you’re buying a family car, make sure it has enough room, up to date safety features, and the hardware necessary to install a car seat correctly.

2. Compare prices

Use sites like Kelley Blue Book, Edmunds, and other guides to find out how much you should expect to be paying for the car you want. Visit multiple dealerships to try and find the best value, and don’t be afraid to try to talk them down if you know they’re asking for more than the car is really worth.

3. Get financing first

If possible, get yourself pre-approved for an auto loan from your bank before you go to the dealership. Your bank will usually offer better rates and terms than the lender that the dealership will want you to use. You also will have the flexibility to take your loan to whatever dealership you want to do business with.

4. Make the most of your test drive

The test drive is your chance to ensure that you really feel comfortable driving the car you’re interested in. You want to verify that it handles the way you want it to, that the seats feel nice, the dashboard components are easy to see and operate, and that driving it “feels right” to you.

The best way to have an easy and successful car buying process is to take time beforehand to learn exactly what you want to buy and how much you’re willing to pay for it. Follow those guidelines and it doesn’t have to be difficult at all.

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Payroll Tax vs Income Tax

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As a workplace, you are in charge of withholding fees from employee income. Employment taxes emerge from each employee’s gross pay and can be divided into payroll taxes and taxes. Many people use the terms payroll service fees and income taxes interchangeably, nonetheless they are different.

Learn about payroll tax vs tax here.

Income taxvs payroll tax

Payroll tax and income tax are separate communities, but you need to find out both to be able to withhold employment taxes.

  • Payroll tax contains Sociable Security and Medicare fees, in any other case known as National Insurance Contributions Act (FICA) tax. FICA tax is an employer-employee tax, indicating both you and your employees will donate to it.
  • Income tax comprises of federal, express, and local income taxes. Unless exempt, every employee pays federal income tax. Most states likewise have state tax. Some localities have yet another local tax as well.

After withholding taxes, you need to deposit and record those to the IRS. Your depositing agenda would be the same for both payroll and taxes. Moreover, you will report them on the same form (Form 941 or Form 944). However, federal government income taxes and payroll taxes have distinct lines on the reporting form.

Payroll tax

Payroll service duty is a share that you withhold from employee wages. You need to withhold 7.65% of every employee’s gross wages from their pay. Moreover, you add a matching 7.65%.

So, if an employee earns $500 per paycheck, you will withhold $38.25 ($500 X .0765) using their company paycheck. Additionally, you need to contribute $38.25.

Community Security and Medicare

Social Security duty is 6.2%. There is a Social Security income base limit, and that means you just need to withhold up to a certain amount. When a worker earns $127,200, you will minimise withholding. Moreover, you will stop paying the employer portion.

Medicare tax is 1.45%. Unlike Sociable Security tax, there is no Medicare wage base limit. Instead, there can be an Additional Medicare tax.

You’re probably thinking about — what is the goal of payroll taxes? Payroll service taxes finance Sociable Security and Medicare programs. This consists of retirement, disability, healthcare, hospice attention, and survivor of deceased staff member benefits.

Income tax

Income tax identifies federal, express, and local income taxes. Unlike payroll duty, thetax is not just one flat rate. Government income tax will depend on your employee’s withholding allowances. Once you hire a worker, they have to fill out Form W-4, Employee’s Withholding Allowance License.

On Form W-4, employees can enter into an unlimited variety of allowances. A lot more the employee statements, the less you withhold for national income tax. To regulate how much to withhold for nationaltax, you must use IRS Publication 15.

State income tax works much like afederal tax. If there is state tax, you will give your employee a state income tax withholding form. Employees can promise allowances from status income tax.

Things to retain in mind

Although payroll fees and income taxes are not one in the same, you need to withhold both from your employees’ paychecks. Doing payroll by hand is an option for deducting payroll and income taxes, but this is frustrating and lead to mistakes.

Make payroll easier on yourself. Patriot’s online payroll software withholds deductions from staff salary. Moreover, our payroll services option will deposit and document taxes for you. Check it out free of charge today at payrollserviceaustralia.com.au!

Payroll Tax
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