How do you work with SSI payroll reports if you create paychecks for your business? Read more in this social security guide.
Are you among the 40% of business owners who take their own salaries? This is a bold move that can be time consuming and confusing.
You should find out the rules for reporting SSI wages and state and local taxes. You don’t want to have problems with the tax authorities because you made a mistake. This can be very expensive for your business.
Learn more about SSI taxes and how you can make sure your business is reporting SSI wages.
What are SSI taxes?
SSI stands for Social Security Income. The Social Security Program was adopted by the Roosevelt administration in 1935. It was supposed to provide economic security to Americans upon retirement.
This program continues today, although it is often subject to political pressure. You may know this as OASDI, which stands for old age, survivor and disability insurance.
The way it works is that every American who works contributes to the program through income tax. When they reach retirement age, they can receive Social Security income. They can also receive money if they are disabled and can no longer work.
The amount they can receive depends on when they retire and how much they have contributed to their careers.
SSI Payroll Reports and Your Business
SSI payroll reports affect your business in a variety of ways. First, you must deduct a percentage of your employee’s income when you complete the payroll. This percentage is 6.2% of their salary.
As an employer, you deduct 6.2% on employees and match this contribution with a total of 12.4%.
Employers must also withhold Medicare taxes, which is 1.45%. Again, you must match the employee’s contribution. For employees who earn more than $ 200,000 per year, you need to withhold an additional 0.9%.
For self-employed persons, you are solely responsible for paying the full amount of OASDI and Medicare taxes. This is called the self-employment tax, which is 15.3% of your income.
You may be familiar with the term FICA. This means the Federal Insurance Contributions Act. This is a law that requires you to withhold and contribute to Social Security and Medicare.
The FICA withholding that appears on paid bills is a combination of OASDI and Medicare taxes.
FICA Tax Record Keeping
If you want to stay on the right side of the law, you need to keep accurate records of what you paid to employees and the amount of taxes withheld.
You need to keep payroll. records for four years, according to the IRS. This can be tricky if you are using spreadsheets to calculate payroll, it would be in your best interest to use a check maker to keep accurate records in case your payroll taxes are questioned.
A Simple Tax Guide for Small Businesses
One of the most confusing areas of owning a business is accounting. This is because there are so many taxes to track. Not only that, you also have reporting requirements.
SSI Payroll Reports are confusing because they are often confused with Medicare taxes, and there are a number of terms that mean the same thing. Just remember that you deduct a percentage of wages and compare it.
The percentage may change, so you want to check with the IRS or your accountant for the latest information.
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