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The tax is paid at a graduated rate depending upon the size of the employer. The current rates (as at June 2007) are 10% for small employers [8] and 14% for larger employers. 8% of the total remuneration is deduction from the employee, the remainder of the liability is met by the employer. The first US$10,000 of remuneration are free from ...
Employee salaries are subject to FICA tax (Social Security & Medicare tax) – currently 15.3 percent (6.2% Social Security paid by the employee; 6.2% Social Security paid by the employer; 1.45% employee Medicare and 1.45% employer Medicare). The distribution of the additional profits from the S corporation will be done without any further FICA ...
The over-payment would be entered on the applicable line of Form 1040 and, assuming the employee did not owe any other Federal taxes, would be refunded to the employee. The employers who each paid $4,340 will not get a refund, since they are not aware that the employee overpaid in aggregate for the year. The government keeps the $818.40 overage.
The sum of the incomes in the three boxes is the "threshold income". It determines thresholds for tax deductions, e.g. for gifts (see below). The deductible amount is subtracted from the income in box 1; if this is not enough, the remainder is subtracted from the income in box 3, and finally from box 2.
For example, the payroll tax system (FICA), a 12.4% Social Security tax on wages up to $117,000 (for 2013) and a 2.9% Medicare tax (a 15.3% total tax that is often split between employee and employer) is called a regressive tax on income with no standard deduction or personal exemptions but in effect is forced savings which return to the payer ...
Relevant banking employee is very broad term which determines employees that are subjects to the bank payroll tax. More specifically “an employee of a taxable company is a relevant banking employee of the taxable company if the employment in which the employee is employed by the taxable company is a banking employment, and either— (i) the ...
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