$ $ $ $ Section 3 Tax Liability Payments and Tax Reports Chapter 13 $ Section 3 Tax Liability Payments and Tax Reports $ What You’ll Learn How to pay payroll tax liabilities. Which tax reports are prepared and filed. $ $

$ $ $ $ Why It’s Important Key Terms Chapter 13 Section 3 Tax Liability Payments and Tax Reports (cont'd.) Chapter 13 $ Why It’s Important Business owners must pay their payroll liabilities and file payroll tax reports promptly and accurately. $ Key Terms Federal Tax Deposit Coupon Electronic Federal Tax Payment System Form 940 Form 941 Form W-2 Form W-3 $ $

$ $ $ $ FICA and Federal Income Taxes Chapter 13 Section 3 Tax Liability Payments and Tax Reports (cont'd.) Chapter 13 $ FICA and Federal Income Taxes One payment is made for: $ social security and Medicare taxes (both the employees’ and the employer’s shares) and employees’ federal income taxes withheld. The Federal Tax Deposit Coupon (Form 8109) is prepared and sent with the check. The form identifies the type of tax and the tax period. $ $

$ $ $ $ Payment of Federal Payroll Tax Liabilities Chapter 13 Section 3 Tax Liability Payments and Tax Reports (cont'd.) Chapter 13 $ Payment of Federal Payroll Tax Liabilities $ JOURNAL ENTRY $ $

$ $ $ $ Payment of State Income Taxes Chapter 13 Section 3 Tax Liability Payments and Tax Reports (cont'd.) Chapter 13 $ Payment of State Income Taxes $ JOURNAL ENTRY $ $

$ $ $ $ Payment of Federal Unemployment Taxes Chapter 13 Section 3 Tax Liability Payments and Tax Reports (cont'd.) Chapter 13 $ Payment of Federal Unemployment Taxes $ JOURNAL ENTRY $ $

$ $ $ $ Payment of State Unemployment Taxes Chapter 13 Section 3 Tax Liability Payments and Tax Reports (cont'd.) Chapter 13 $ Payment of State Unemployment Taxes $ JOURNAL ENTRY $ $

$ $ $ $ Payment of Other Payroll Liabilities Chapter 13 For example: Section 3 Tax Liability Payments and Tax Reports (cont'd.) Chapter 13 $ Payment of Other Payroll Liabilities For example: insurance premiums union dues charitable contributions $ $ JOURNAL ENTRY $

$ $ $ $ Preparing Payroll Tax Reports Chapter 13 Section 3 Tax Liability Payments and Tax Reports (cont'd.) Chapter 13 $ Preparing Payroll Tax Reports Form W-2 summarizes an employee’s earnings and withholdings for the calendar year. Form 940 is used to report the employer’s unemployment (state and federal) taxes. Form 941 is the employer’s quarterly federal tax return on which accumulated amounts of FICA and federal income tax withheld from employees’ earnings, as well as FICA tax owned by the employer, are reported. $ $ $

$ $ $ $ Transmittal of Wage and Tax Statements Chapter 13 Section 3 Tax Liability Payments and Tax Reports (cont'd.) Chapter 13 $ Transmittal of Wage and Tax Statements Form W-3 summarizes the information contained on the employees’ Forms W-2. $ $ $

$ $ $ $ Check Your Understanding Chapter 13 Section 3 Tax Liability Payments and Tax Reports (cont'd.) Chapter 13 $ Check Your Understanding $ What accounts are affected when a business pays the federal unemployment tax? $ $