1. EIN: Employer Identification Number . Also known as a Federal Tax Identification Number, and is used to identify a business entity. You would typically need an Employer Identification Number if you have employees or if you operate your business as a corporation or a partnership. The IRS website has an easy guide named "Do You Need an EIN?" that will help you decide if you need one or not. You can apply for a new EIN online (this is the easiest and fastest method) , by calling the Business & Specialty Tax Line at (800) 829-4933, by fax or by mail.

2. Circular E: Employer's Tax Guide, also known as Publication 15. This publication explains employers' responsibilities for withholding, reporting, depositing and paying payroll taxes. It includes information on employment taxes such as income, social security, Medicare, and federal unemployment. Circular E gets published annually at the end of the year.

3. EIC: Earned Income Credit. Also known as the Earned Income Tax Credit (EITC). The EIC is an important anti-poverty and work incentive program that is run by the federal government. The Earned Income Credit targets families or individuals who earn low to moderate wages. If a worker qualifies for the program, the EIC will lower or eliminate any taxes owed. If a worker is not required to pay any taxes or if the credit is larger than any taxes owed by the worker, then he or she will receive a refund from the IRS after filing am individual tax return. In such cases, the federal government is providing low-income workers additional money beyond what they get paid at their jobs to encourage work and to reduce poverty. To qualify for the EIC, an individual must have a job, have wages below a certain level, and file a federal tax return to the Internal Revenue Service. There are additional rules and restrictions that apply as well.

4. FUTA: Federal Unemployment Tax Act. The Federal Unemployment Tax Act (FUTA), with state unemployment systems, provides for payments of unemployment compensation to workers who have lost their jobs. Most employers pay both a federal and a state unemployment tax. Only the employer pays FUTA tax; it is not withheld from the employee's wages. For 2007 and 2008, the FUTA tax rate is 6.2%.

The tax applies to the first $7,000 that the employers pays to each employee as wages during the year. The FUTA Taxes get deposited on a quarterly basis : on Mar. 31, June 30, Sept. 30 and Dec. 31. The IRS form 940 is used to report Federal Unemployment Taxes, you can visit the IRS website to get the instructions for using this form and to get a copy of the form itself. In general an employer is subject to FUTA taxes if s/he paid wages of $1,500 or more in any calendar quarter in 2007 or 2008, or s/he had one or more employees for at least some part of a day in any 20 or more different weeks in 2007 or 20 or more different weeks in 2008 (this rules doesn't apply to employees who are farm-workers or household workers).

5. FICA: Federal Insurance Contribution Act. FICA Provides benefits for retired workers and their dependents as well as for disabled workers and their dependents. The taxes imposed under this law fund "Social Security Tax" and "Medicare Tax". This tax is paid by both the employee and employer. For 2009, the wage base for withholding social security (old age, survivors, and disability insurance) is $106,800.There is no wage base limit for Medicare . For social security, the tax rate is 6.2% . For Medicare, the rate is 1.45% each for employers and employees. There are no withholding exemptions permitted for calculating Medicare or Social Security Taxes.