How often are federal employment taxes typically deposited by most employers?

• A. Annually, at the end of the fiscal year
• B. Quarterly, along with Form 941
• C. Every pay period, regardless of the amount
• D. Semi-weekly or monthly, depending on the total tax liability

Answer: (D)

Verified step by step guidance

1. Understand the concept of federal employment taxes: These are taxes that employers are required to withhold from employees' wages, including Social Security, Medicare, and federal income taxes, and remit to the government.
2. Learn about deposit schedules: The IRS determines the deposit schedule (semi-weekly or monthly) based on the employer's total tax liability during a 'lookback period,' which is typically the previous year.
3. Monthly deposit schedule: Employers with a total tax liability of \$50,000 or less during the lookback period are required to deposit federal employment taxes on a monthly basis. Deposits are due by the 15th of the following month.
4. Semi-weekly deposit schedule: Employers with a total tax liability greater than \$50,000 during the lookback period must deposit federal employment taxes on a semi-weekly basis. For wages paid on Wednesday, Thursday, or Friday, deposits are due by the following Wednesday. For wages paid on Saturday, Sunday, Monday, or Tuesday, deposits are due by the following Friday.
5. Review exceptions: Employers with very small tax liabilities (less than \$2,500 for the quarter) may be allowed to pay their taxes quarterly when filing Form 941, instead of following the monthly or semi-weekly deposit schedule.