Federal Income Tax Withholding Formula for 2011, 2012

The Federal income tax withholding formula can be very complicated at best. Reporting and depositing payroll taxes to the appropriate agency in an accurate and timely manner is vital to your business. Late or inaccurate deposits may result in penalties and interest charges.

These complex payroll tax requirements may seem intimidating but by using the tax withholding calculator from Intuit, you can make this job a lot easier. Federal & State withholding and unemployment taxes are calculated for you, then pay employees with direct deposit, or print checks & stubs on your printer.

If you want to do it yourself you can use an online withholding calculator from the IRS. To perform the calculation yourself, you’ll need the following information:

• W-4, which shows your exemptions. You might have to call your Human Resources Department to get this information. It’s not a bad idea to update your W-4 annually. Remember, the more exemptions you take, the less that will be withheld from your paycheck each period. Your goal should be to get the amount withheld as close to the amount that you will owe when your taxes are due.

• Your pay rate, frequency, 401(K) contribution amount, health insurance, dental insurance, flexible spending account contributions, and any other before-tax contributions.

A Better Way To Calculate The Federal Income Tax Withholding Formula

Try using Quickbooks online payroll withholding tax calculator. Federal & State withholding taxes are calculated for you, then you can choose to pay employees with their free direct deposit, or print checks & stubs on your own printer.

Help for Individuals and Business Owners

If you are a business owner and have a lot on your plate already, then I suggest you let the tax experts help you with your tax needs. You don’t even need to know anything about business taxes at all. Audit Alert points out tax deductions and tax situations that may increase your risk for an IRS audit. The software will double check your return for accuracy and completeness. TurboTax Online has all of these benefits and many more. Visit their site today to see their long list of services!