What The F$#k Are Payroll Taxes!?

Question of the week (April 13th)

Submitted by: Jori J.

Owner at Brand & Buoy 

Q: Hi Taxes Tampa,

I recently started my own boutique branding agency and would like to know how to navigate the tricky world of payroll taxes. I am unsure of how much tax to withhold and what forms to file. Any advice is appreciated!

A: Hi Jori!

Great question! Payroll taxes are extremely confusing and this is a question we get a lot. First, congratulations on starting your own company and escaping the land of cubicles. Second, depending on your salary I will share an easy formula to calculate your tax liability to ensure compliance. 

Example: Jane makes $50,000 a year on her business and sets her salary to $15,000. Since Jane is an employee but also the owner, she has to match her own FICA taxes. For simplicity, Jane decides that she will use the same numbers for every monthly check.

 Monthly Payroll of $1,250.00

($15,000)/(12 months)

 FICA Taxes Withheld

- Social Security Tax:

($1,250) *(0.124) = $155.00

-Medicare Tax:

($1,250)*(0.029) = $36.25

- Federal Withholding

 ($1,250)*(10%) = $125.00 Jane decides to withhold an additional 10% just to be on the safe side and minimize her tax liability at year end. 

-Net Monthly Paycheck: $933.75

 -Net Monthly Payroll Taxes: $316.25

So Jane will write herself a monthly check of $933.75 & remit the remainder of $316.25 as payroll taxes.


The forms you will need to file are the 941 (Federal) & the RT6 (State of Florida). We hope this answered your question, thanks Jori!

About Brand & Buoy:

Local Tampa Branding Agency dedicated to perfecting your business. Services include: Brand Consulting, Brand Identity, Marketing Strategy, Social Media, Art Direction & Logo Design.


https://brandandbuoy.com/ 



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stephanie@taxestampa.com   |   Tampa, FL 33606

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