Employment Taxes If you have employees, you will need to file forms to reportemployment taxes. Employment taxes include the following items. Social security and Medicare taxes. Federal income tax withholding. Federal unemployment (FUTA) tax. For more information, see Publication 15,Circular E,Employer's Tax Guide. That publication explains your taxresponsibilities as an employer. To help you determine whether the people working for you are youremployees, see Publication 15-A,Employer's SupplementalTax Guide. That publication has information to help youdetermine whether an individual is an independent contractor or anemployee. Caution: If you incorrectly classify an employee as an independentcontractor, you can be held liable for employment taxes for thatworker plus a penalty. An independent contractor is someone who isself-employed. You do not generally have to withhold or pay any taxeson payments to an independent contractor.