If you operate a large food or beverage establishment, you have to file Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips, with the IRS every calendar year for each large food or beverage establishment in which you have employees. (These forms are transmitted with Form 8027-T, Transmittal of Employer's Annual Information Return of Tip Income and Allocated Tips, if you have more than one establishment.)

Employers that are "large food and beverage establishments" are subject to special tip reporting and allocation rules. These rules require you to allocate at least 8 percent of your gross receipts to employees as tips, if your employees don't report receiving at least that much. The allocations are not used to determine your actual payroll tax obligations, however; they are reported to the IRS strictly for informational purposes.

Many businesses reimburse their employees when the employees pay for business-related travel, entertainment, or other types of expenses. But how can you make sure that these reimbursements will not trigger additional payroll taxes for you and your employees?

In general, payments you make to your employees for services they'll perform or complete in the future are considered taxable wages for all payroll tax purposes.

Because the IRS basically does not believe that employers can act with a detached and disinterested generosity toward their employees, most gifts that you give to your employees are presumed to be compensatory in nature. Accordingly, unless you can show that a gift is connected with an event that's totally unrelated to your business (for example, an employee's wedding), gifts to your employees are considered taxable wages for payroll tax purposes. Gifts of property are treated no differently from monetary gifts.

There is much to be said for hiring your family members to work in your business. Not only may you find that they'll agree to work cheap (at least until you begin to rake in the big bucks!) and at all kinds of odd hours of the day and night, but you may also realize some savings in payroll tax dollars.

Once you've identified the workers for whom you have payroll tax obligations, the next step is to determine what portion of the compensation you pay those workers is actually taxable.

In most cases, whether you have an obligation to withhold and pay payroll taxes will depend on whether your workers are properly classified as being employees or independent contractors.

For the most part, salespersons are treated the same as any other workers for payroll tax purposes. Thus, you'll generally have to withhold and pay payroll taxes if your salespersons are your employees. And, except with respect to certain traveling or city salespersons, you won't have any payroll tax obligations with respect to salespersons who are independent contractors.

Determining the level of control you have over your workers is the key to resolving the issue of whether your workers are employees, for whom you have payroll tax obligations, or independent contractors, for whom you do not. When IRS auditors analyze this issue, they generally work through a list of 20 different factors before concluding whether a sufficient level of control is present to create an employer-employee relationship. They also look at three categories of evidence when looking at the level of control: (1) behavioral control; (2) financial control; and (3) relationship of the parties. You should go through this same exercise before you try to claim that someone who does work for you is an independent contractor and not your employee.

The tax law provides a "safe haven" rule that, for some employers, can minimize your uncertainty when it comes to the proper treatment of workers as employees or independent contractors for purposes of employment taxes. If you meet the terms of the rule, your characterization of an individual as an independent contractor will not be challenged.

The general rule is that you only have payroll tax obligations with respect to workers who are considered employees, and you don't have to withhold or pay payroll taxes for independent contractors.

As a general rule, your obligation to withhold and to pay payroll taxes applies to any workers you have who are properly classified as being employees as opposed to independent contractors. Only in rare circumstances will a business be relieved from payroll tax obligations with respect to employees or be responsible for payroll taxes with respect to your independent contractors.

Take a moment to think back to the day you received your first real paycheck. If you're like many of us, you may recall experiencing some shock upon noticing that the check amount was much less than your actual salary.

Before you can calculate your payroll tax liabilities, you must first determine which of the people who work for you, if any, are "employees" for whom you must withhold and pay taxes. If none of your workers are classified as employees, you generally won't have to worry about payroll taxes at all!

One of the biggest hurdles you'll face in running your own business is to stay on top of your numerous obligations to federal, state, and local tax agencies. A tax headache is only one mistake away, be it a missed payment or filing deadline, an improperly claimed deduction, or incomplete records. And, you can safely assume that a tax auditor presenting an assessment of additional taxes, penalties, and interest will not look kindly on an "I didn't know I was required to do that" claim. The old legal saying that "ignorance of the law is no excuse" is perhaps most often applied in tax settings.