3 E TAX Solutions LLC
About 3 E TAX Solutions LLC

Payroll Services

The payroll system is used to calculate:

  • Employee wages
  • Overtime
  • Shift Differential and Bonuses
  • Federal, State and Local income

The payroll system allocates employee pay deductions such as medical, transit check, 401k, garnishments, etc. This includes federal, state, and local tax withholdings. Employees can get paid weekly, biweekly, and twice a month.

A company can process their own payroll or hire an outside contractor such as ADP or Paychex. If the company uses a third party to process the payroll, the payroll company will process the employees payroll, make tax deposits and file quarterly tax reports on behalf of the employer.

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NOTE: The employer should have a separate Payroll Trust Fund Account for employee direct deposits and payroll taxes. This account should only be used for payroll liabilities. If the 3rd party payroll company fails to make timely payroll deposits and quarterly reports, the employer is still responsible for the payments and report filings.

Each Quarter the employee wages are calculated and reported on 941 to the IRS. The 941 shows:

  • The number of employees for the quarter
  • Federal withholding of Social Security and Medicare Tax for the employee and employer
  • Also calculates the amount the employer paid each month in payroll taxes to the IRS.

The 941 can be either electronically filed or mailed to the IRS for each quarter. If mailing to the IRS, use USPS and return receipt required.

At the end of the year all employee wages are calculated for the year and reported on Form W-2. The employer must distribute form W-2 to employees by January 31, and must be e-filed to the Social Security Administration by the same date. Form W-3 is used to reconcile the total amount of W-2 wages and sent to the Social Security Administration, upon which the Social Security Administration sends the information to the IRS.

Services Offered By 3 E TAX Solutions LLC