Payroll taxes are taxes paid on the wages and salaries of employees.
These taxes fund social insurance programs such as Medicare and Social Security. A company owner, or chief officer is typically held personally liable for paying payroll taxes, however the IRS can pursue more than just one person for this type of tax debt. The tax assessment is for 100% of the tax due, and unpaid payroll taxes are sometimes referred to as a 100% penalty type of tax liability.
Payroll taxes that your business pays to the IRS are especially important to them. Did you know that around 70% of the annual revenue that the IRS collects is generated from payroll taxes? If you fail to pay your payroll taxes for a business that you own, you will receive a bill from the IRS and a penalty for any back payroll taxes that you owe. Employers that do not pay employment taxes can be subject to civil AND criminal penalties.
You could face imprisonment for not properly paying your payroll taxes
The four basic types of payroll taxes are: federal income, Social Security, Medicare, and federal unemployment. Employees pay a portion of the Social Security and Medicare taxes, and the employer (you, if you are the business owner) must match the deduction and send the total amount to the IRS. Typically, if you report $50,000 or less in taxes during the previous period, the employment tax deposit that you are responsible for depositing monthly is referred to as a 941 deposit. These deposits are due by the 15th of the following month if you are monthly depositor.
Some business owners are required to make their deposits on a semiweekly basis if you are reporting more than $50,000 on the previous look-back period.
Failing to Make 941 Deposits
If you fail to make monthly 941 deposits of employment taxes then you will be assessed a 2% penalty on deposits made 1 to 5 days late; a 5% penalty on deposits made 6 to 15 days late; a 10% deposit on deposits made 16 or more days late, but before 10 days from the date of the first IRS notice sent to you letting you know that the tax is due. You can be assessed a 33% penalty on what you owe if you continue to ignore and not file Form 941 deposits.
We Help Businesses and Understand that some Business Deal with Tax Delinquency
For some businesses paying employment taxes is an incredible burden. They are trying to stay afloat, and unforeseen things can happen to everyone. Sometimes the first thing that you think of not paying is the employment taxes for your business. While these types of tax debts add up, you are busy trying to keep your business running smoothly. It is easy to let time pass and fail to pay and make your deposits. We can help you get back on track and work with the IRS.
You Do Not Want to Lose Your Business
One thing is for certain; business owners are hardworking people that do not purposely ignore obligations to the IRS. In worst case scenarios, the IRS could dissolve your business, put you in jail, investigate your employees, and go after your assets. We can help you settle your debts to the IRS and make an agreement to pay off the debt owed in a win-win situation for everyone.
At McCauley Law Offices, P.C., our lawyers will find a solution to your tax problems, no matter how complex your IRS issue is. View our services and contact us (or call 610-388-4474) to schedule a free consultation with one of our tax attorneys. View and purchase Gregory McCauley’s published work “TAXJAMS: Simple Solutions” on Amazon. From our office in Chester County, Pennsylvania, we find tax solutions for clients throughout the country.