person computing taxes

Figuring Out the Ins and Outs of Taxes

It has been said several times, taxes and death are two of the things you can be sure of in life. But that doesn’t mean you have to like either one. Many still balk at the idea of sitting down to work on their tax returns. This major aversion to doing one’s taxes is a curious matter.

Before diving into this, consider the topic from an employer’s point of view.

Taxes from the Employer’s Perspective

If you think working on your taxes is difficult, it becomes more so when the payments and reports are the responsibility of someone else. While employees only need to worry about their income tax, employers must think about the withholding tax and, in most cases, the payroll tax. Mistakes here cause difficult problems that can compromise the company’s reputation.

Withholding Tax

Explaining the difference between withholding tax and income tax can be a pain in the neck; however, the best way to go about this is to see the former as some sort of topping up of a reloadable card. Once the due date for the income tax return comes, you use the top-up value of your card in order to pay whatever is due for the year.

Withholding tax is taken from the pay of the employees. Most payroll services providersfrom Salt Lake City to Des Moines, are able to help you in determining how much tax is due to an employee each month. These cities, along with Louisville, are some of those that impose income tax on employees of private organizations.

Payroll Tax

Some cities and states do not impose income tax on employees. In its place, they must pay what is known as a payroll tax. In this case, no deduction is made from the employee as the whole amount is shouldered by the company. The amount is tied to how much the employee earns, and the reports concerning these payments are typically made on a quarterly basis.

Why People Hate Taxes

man computing bills

It is very rarely the amount that bothers most taxpayers. After all, there is already a general acceptance that you need to pay your taxes as your way of sustaining nation-building. Some people even see this as a badge of honor, because the higher your taxes, the higher your income.

What most people consider as bothersome is the amount of paperwork that goes into it. Although there are forms, they are typically referred to by their code numbers which are difficult for anyone unfamiliar with the process. If you’re like this, you will likely find yourself lost in filing amendments just to get everything corrected.

While you might have learned about algebra and trigonometry in school, you probably did not have a class that would walk you through how to understand the forms that you need to work on when filing your income tax. Luckily, you can depend on your employer’s payroll team to handle your taxes for you. And if you have any questions, you can always approach them for the answers.

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