Have you ever asked your outsourced bookkeeping and accounting services provider how your payroll tax differs from your income tax? Which government entity collects them? Are they paid locally, to the state, or the national government? For what purposes are they collected?
For the government machinery to run smoothly and fund its various projects, taxes are imposed on its citizens and even foreigners who derive income from the country’s sources. However, foreign nationals who belong to a country with tax treaties with the US may be exempt from paying these taxes.
So, next time you outsource bookkeeping and accounting with running payroll and tax return preparation included in their services, you will comprehend what is entered in the payroll and tax return. How exactly do these two types of taxes differ?
Who pays them?
The employee pays for the entire amount of the income tax. In contrast, payroll tax is … Read More