Question

the amount of federal income taxes withheld from employer's gross is recorded as a (n).payroll expense, contra account , asset, liability.

Answer 1

Any Federal Tax withheld from the salary of the employees is considered as the liability of the employer. The amount so deducted is actually belonged to the employees and employer on the behalf of the government legally deduct such amount and provide the same to the government. In simple terms employer act as an abettor of the government by deducting money and providing the same to the government. Furthermore, if any payroll tax is not withheld from the employee salary then it will be treated as the expense of the employer and once the taxes are deducted it stands as the liability unless the employer pays the money to the government.

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