Expert: Ed McFarland - 12/20/2004

Question
I need to become informed on what payroll deductions should be taken from employees wages.  Do you have a resoure(s) I can use.  Specifically what are federal, state (CO) and local requirements for witholdings?

Answer
To find what to has to be taken out, go to www.irs.gov and your local tax department for city and state taxes.

Given filing and payment requirements, I would strongly encourage you to use a payroll service. If you miss a payment or mess up, even unintentionally, the headache is huge. The cost should be no more than $25 to $50 per pay period and you won't have to worry about FUTA and SUTA payments. And if you don't know what those stand for, all the more reason to find a payroll service.

(They are the federal and state unemployment tax funds.)

Also, the annual reporting of 1099 and W-2 preparations can be done by the service. It is money well spent.