Payroll taxes and filings

Which taxes exist, how deposit schedules work, what is filed and when, and how to read the tax screen before a deadline rather than after one.

ReferenceFor Business owners, Bookkeepers, Firm staff

Which taxes exist

Tax	Paid by	Notes
Federal income tax withholding	Employee	Based on their W-4.
Social Security	Both	Employee and employer each pay a share, up to an annual wage base.
Medicare	Both	No wage cap. An additional employee-only rate applies above a threshold.
FUTA — federal unemployment	Employer	On a low annual wage base per employee.
State income tax withholding	Employee	Varies by state; several states have none.
SUTA — state unemployment	Employer	Your rate is assigned annually and varies by state and history.
Local taxes	Varies	City or county taxes exist in some jurisdictions.

Deposit schedules

Withheld tax is not yours. It is held in trust and must be deposited on the schedule the IRS assigns you — typically monthly or semi-weekly — based on your prior-period liability. Your schedule can change year to year, and the tax screen shows the one currently assigned.

What gets filed

Form	Frequency	Covers
941	Quarterly	Federal withholding, Social Security, and Medicare.
944	Annually	The same, for small employers assigned annual filing.
940	Annually	Federal unemployment.
W-2	Annually	Employee wage and tax statement, due to employees in January.
W-3	Annually	Transmittal summarizing the W-2s.
State withholding returns	Varies	By state schedule.
State unemployment returns	Usually quarterly	Wages and contributions by state.

Reading the tax screen

The tax screen shows federal setup — EIN, filing form, deposit schedule — and one row per state where someone works, each with its account numbers and rates. Worksites drive which states appear, which is why adding a remote employee in a new state changes this screen.

Review it:

Every January, when unemployment rates are reassigned.
Whenever someone starts work in a new state.
Whenever the IRS notifies you of a deposit schedule change.
Before each quarter's filing deadline.

Common questions

I received a notice from a tax authority.

Do not ignore it — penalties accrue. Read what period and what tax it concerns, compare against the filings and deposits on record, and contact support with the notice if the records disagree. Many notices resolve as timing differences rather than genuine shortfalls.

My state unemployment rate changed.

Update it as soon as the notice arrives. Running payroll at last year's rate under-accrues the liability all year and produces a balance due at reconciliation.

Do I need to register in a state for one remote employee?

Generally yes — an employee working in a state usually creates a withholding and unemployment obligation there, regardless of where the business is. Register before their first payroll.

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