Employment Taxes

If you have employees, you will need to file forms to report employment taxes. Employment taxes include the following items.

• Social security and Medicare taxes.
• Federal income tax withholding.
• Federal unemployment (FUTA) tax.

For more information, see Publication 15, Circular E, Employer's Tax Guide. That publication explains your tax responsibilities as an employer.

To help you determine whether the people working for you are your employees, see Publication 15-A, Employer's Supplemental Tax Guide. That publication has information to help you determine whether an individual is an independent contractor or an employee.

If you incorrectly classify an employee as an independent contractor, you can be held liable for employment taxes for that worker plus a penalty.

An independent contractor is someone who is self-employed. You do not generally have to withhold or pay any taxes on payments to an independent contractor.

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