Managing payroll taxes: Not easy, but important

Description

Abstract: This past February, Congress extended the reduction of the employee portion of the Social Security tax on earned income. The cut does apply to employees, not employers. But, for construction company owners, using the development as inspiration to review payroll tax management is still a good idea. This article examines which workers are taxable employees (vs. independent contractors) and what kinds of compensation are subject to payroll taxes. It also discusses creating or formalizing an “accountable” tool-reimbursement plan to help manage taxes. A sidebar lists the four major taxes that fall under the generic term “payroll tax.”