What is Legal Terms - Payroll Taxes?

Payroll Taxes Information: In order to guarantee individuals have money to pay their taxes when they are actually due, and to avoid back tax and tax penalty problems, the federal tax code provides that employers can deduct from wages and salary due the employee sufficient money to pay that persons tax liability. Payroll taxes are based on deductions claimed by the taxpayer and the tax rate. Payroll tax software is necessary in firms of any size at all. Payroll taxes also include employer made deductions for social security tax. Funds withheld by the employer must be kept in what is called a Treasury Tax and Loan Account. Those who are self-employed must pre-pay, in effect, an amount based on the estimated tax that will be due. Estimated taxes must be paid in four annual installments.