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Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 29558
Experience:  Taxes, Immigration, Labor Relations
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need to issue my first payroll check of the year from my own

Customer Question

need to issue my first payroll check of the year from my own C Corporation. How do I calculate the payroll taxes on $10,000 gross? I also understand there is a California form that exempts me from either disability or unemployment tax/withholding (I can never remember which!) because I'm the sole owner/employee.

So... what does the paycheck withholding look like for each deduction?
To what agencies do I send what amounts with which forms?
Which form do I file with which California agency to exempt myself from the appropriate tax/withholding?

Thank you!
Submitted: 4 years ago.
Category: Tax
Expert:  Lev replied 4 years ago.

LEV :

Hi and welcome to Just Answer!
1.
You are not required to do income tax withholding - so you may choose either to withhold or to p[ay estimate taxes on your own. Without income tax withholding you pay stub should look as
Gross Pay $10,000
Federal Withholding zero
Social Security $620
Medicare $145
California Withholding zero
SDI $100

Net Pay $9,135
2.
In additional C-corporation will pay
Social Security $620
Medicare $145
All Social Security and Medicare taxes are paid to the IRS. See IRS publication 15 - www.irs.gov/pub/irs-pdf/p15.pdf - page 24 - Depositing Taxes.
3.
Here is the form to use to be excluded only from State Disability Insurance (SDI) coverage - http://www.edd.ca.gov/pdf_pub_ctr/de459.pdf In this case - no SDI should be withheld.

4.
Other applicable rates - see here - http://www.edd.ca.gov/payroll_taxes/rates_and_withholding.htm

Customer :

Not for withholding, but exemption: am I exempt from SDI or unemployment? Do I need to file something to establish that?

LEV :

There is no automatic exemption.
Here is the form to use to be excluded only from State Disability Insurance (SDI) coverage - http://www.edd.ca.gov/pdf_pub_ctr/de459.pdf
If you file this form - no SDI should be withheld.

Expert:  Lev replied 4 years ago.
Just in case you were not able to use the chat - I am switching to Q&A mode and porting the answer below.
Please feel free to communicate if you need any clarification or have other tax related issues.

There is no automatic exemption.
Here is the form to use to be excluded only from State Disability Insurance (SDI) coverage - http://www.edd.ca.gov/pdf_pub_ctr/de459.pdf
If you file this form - no SDI should be withheld.