The IRS states that the employer and the employee should take the responsibility of paying taxes. According to the law, the employer is supposed to hold tax of the employees from their paychecks. The employees should allow the employer to deduct the tax from their salary. It is the responsibility of the employee to pay these withholding taxes if he is self-employed.

What is the responsibility of an Employer?

According to the law, employers should properly report the income and employment taxes withheld in the Employer’s Quarterly Federal Tax Return (Form 941). Employers are also responsible for filing a FUTA return annually, and depositing those taxes.

Employers who fail to comply with the employment tax laws have to face criminal and civil sanctions for willfully failing to pay employment taxes.

What is the responsibility of Employees?

Employees should give complete information to their employers. They should allow the employer to deduct the tax amount before they give them the pay. Employees, who do not have taxes withheld nor remit them personally, are still liable for these taxes and may not qualify for Social Security, Medicare, or unemployment benefits. If the employee is unable to secure a W-2 from the employer, the employee should complete and attach Form 4852, Substitute for W-2, to their tax return using the best information available to calculate the wages and the withholding.

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