Federal Income Tax (FIT) Withholding

Federal Income Taxes (FIT) are taxes that the federal government requires to be withheld from employees' earnings. Understanding FIT is essential to maintain compliance and make payroll processing hassle-free.

How FIT Works in Payroll

As an employer, you're responsible for deducting these taxes from your employees' paychecks and submitting them to the IRS. 

Employee Withholding: The amount of FIT withheld from an employee’s paycheck depends on several factors:

• Employee's salary or wages.
• Pre-tax benefits and deductions
• Employee Elections on their Federal W-4 (IRS: About Form W-4)
• Any additional withholdings specified by the employee.

Employer Responsibility: Employers must withhold the appropriate amount of FIT from employees’ paychecks and deposit it with the IRS regularly. It’s important to make sure your deposit frequency is set up correctly within GoCo to ensure timely processing. 

Reporting FIT: FIT amounts must be reported on Form 941, the Employer's Quarterly Federal Tax Return, and on employee W-2 forms at year-end.

For More information on Payroll Tax Documents you can visit  Goco Payroll Tax Documents

When to Submit a New W-4

Employees should submit a new W-4 when:

• Their filing status changes (e.g., from Single to Married).
• They have a new child or dependent.
• They want to adjust their tax withholding.

Want to know more about Form W-4?

For an in depth look at W-4 and 2024 changes check out:

Guide to W-4 Withholding Forms

For any additional questions, please reach out to us at help@goco.io 💚