Who pays the employee's federal withholding taxes?

The reason the correct answer is that the employer sends in the money lies in the employer's responsibility under federal tax law. When an employee earns wages, the employer is required to withhold a portion of the employee’s earnings for federal income tax, Social Security, and Medicare taxes. This withheld amount is then remitted to the federal government by the employer on behalf of the employee.

In this system, the employer acts as an intermediary. The employee does not pay the federal withholding tax directly; instead, it is deducted from their paycheck. While the contractor or the accountant might handle the logistics of payroll and tax submissions, it is ultimately the employer's obligation to ensure that the appropriate federal taxes are withheld and sent to the IRS timely and accurately.

This structure is designed to simplify the process for employees. They receive their income net of taxes, and it assures that the necessary taxes are being collected and submitted to the government, which helps maintain compliance with tax laws.