QUESTION:
This last quarter of 2023 is the first time my side business has had an employee besides myself. I’m used to paying estimated taxes for my FICA responsibility, but what’s required for my new employee?
ANSWER:
Short answer: Your business generally should withhold 7.65% (6.2% for Social Security; 1.45% for Medicare) of the employee’s earned income up to $160,200 for FICA. It’s also required to match that amount on the employee’s behalf. The full 15.3% is then reported (IRS Form 941) and paid to the IRS quarterly in January (fourth quarter 2023), April (first quarter 2024), July (second quarter), and October (third quarter). We can help you.