Social Security Tax – Flashcards

Having 1 or more employeesl, full or part-time, is subject to Social Security Laws of the IRS; Must have Employer's Identification Number (EIN) from IRS or SS Administration; Must copy SSN of employer directly from Original Social Security Card.

Federal Insurance Contribution Act; Est. by Fed. Gov. as insurance for workers when they retire or become unable to work; Contributions made by both Employee & Employer at a % of employee wages (equally); Percent Est. during the year, currently at (7.65%); Paid to IRS quarterly.

Requires that each employer furnish his employees at end of calendar year or terminatin of employment a written statement showing Period Worked, Wages Paid, & FICA deductions.

Used when paying Independent Contrators (Lic. Sub) as opposed to wage earners; Independent Contractor pays own Social Security Tax Yearly at 15.3% on Schedule SE; May be issued at End of Year by Employer.

Contractor regarded as consumer of 'MATERIALS' & retailer of 'FIXTURES'; Sales Tax or Use Tax applies to tangible personal property and due upon the cost of such materials to the contractor.

If Sales Tax is paid by Contractor at time of sale, the contrator has no further sales tax liability; Unless contractor marks up materials before resale; Sales tax is reported to State Board of Equalization.

Available through State Board of Equalization; If Contractor uses Resale number, he would buy it wholesale and now be responsible for reporting all taxes due after selling to customer; Only with Resale Number can Contractor LEGALLY markup products being sold.