In preparing a budget for a day care center, you must plan for taxes. As an employer, you must pay part of each employee's---- tax.
A.Social Security
B.federal income
C. state income
D. local
My answer is A.Can someone check this answer for me.
Looks good.
Thanks for your help.
To confirm the correct answer, you need to understand the different types of taxes that an employer is responsible for paying on behalf of employees.
A. Social Security tax: This tax is used to finance the Social Security program, which provides benefits to retired and disabled workers, as well as their dependents. As an employer, you are required to contribute a certain percentage of your employees' wages to the Social Security fund. However, this tax is not the only tax that an employer must pay.
B. Federal income tax: Employees are required to pay federal income tax on their earnings, and it is their responsibility to calculate and pay this tax. As an employer, you are responsible for withholding the applicable federal income tax amount from your employees' wages and remitting it to the Internal Revenue Service (IRS) on their behalf. Therefore, the employer's role is to collect and transmit the tax, but not actually paying it.
C. State income tax: State income tax is imposed on individuals' income by certain states within the United States. In some states, employers are required to withhold state income tax from employees' wages and remit it to the state revenue department. However, not all states have a state income tax, so this may not be applicable to all day care centers.
D. Local tax: Similar to state income tax, some local jurisdictions have their own taxes imposed on individuals' income. These could include city or county income taxes. Again, not all locations have local taxes, so this may not be applicable in every case.
In the context of employee payroll taxes for a day care center budget, the most accurate answer would be A. Social Security tax. This is the portion that the employer must contribute to the Social Security program based on a percentage of the employees' wages. However, it is important to note that employers also have responsibilities related to federal income tax, state income tax (if applicable), and local tax (if applicable).
In summary, for the given question, the correct answer is A. Social Security tax. But it is important to acknowledge that there are other taxes that an employer may be responsible for in the context of payroll.