If your business pays income to employees, you must withhold payroll taxes from their wages, including Medicare, Social Security, and federal income taxes. You are also responsible for depositing the income tax withheld and filing quarterly payroll tax returns with the Internal Revenue Service.
If you are late depositing payroll taxes or filing your return, the IRS will impose 941 late payment penalties. The IRS can be very aggressive in collecting the tax debt, not only from your business but also from the owners and officers. They can even garnish your business accounts and file tax liens against your assets. To lift these penalties, you need the help of a tax accountant with years of experience settling payroll tax debts for employers like you.
Payroll Tax Problems
The absolute most serious of all tax problems is the failure to collect and pay to the government any payroll taxes that were withheld from employees. These payroll taxes are referred to as trust funds and are strongly collected by the IRS. When the IRS detects stacking of payroll taxes through the continued payment of net wages and the continuing failure to remit the related payroll taxes, they will not hesitate to seize assets and close the business down. If you are delinquent in the payment of payroll taxes, it is extremely important that you tackle the issue at the earliest possible time.
We can help with Payroll Tax Problems!
At Showalter CPA, we are payroll tax problem experts! We have worked with hundreds of businesses over the years get back on track and stay in business. Timing can be very important in payroll tax problem cases, and you need to contact a tax accountant today. Call us today at (605) 646-3585.
When you become our client, you will not have to speak to the IRS anymore. If they want information or to talk to you, they will have to go through us. The first step to getting tax problem help is calling us at (605) 646-3585 and scheduling a free, no obligation case evaluation with one of our tax accountants. Let us help with your payroll tax problem. Call (605) 646-3585 today.
When Are You Required to Deposit Payroll Taxes?
If your business reported a total of $50,000 or less in tax liability for the prior four quarters, you must deposit taxes each month by the 15th day of the following month. If you reported more than $50,000 in taxes, you must deposit biweekly (once every two weeks) depending on your payday.
If payday falls on a Wednesday through Friday, you must deposit taxes by the following Wednesday. If payday is Saturday through Tuesday, you must deposit taxes by the following Friday.
Late Deposit Penalties for Payroll Taxes
If your payment is less than 5 days’ late, the IRS charges a penalty of 2 percent of the unpaid tax. Deposits made 6-15 days late are charged a 5 percent penalty. If your payment is more than 16 days late, the IRS charges a 10 percent penalty. You will also accrue interest on any unpaid balance.
When and How Must You File your Payroll Taxes Form 941?
You must file Form 941, the business quarterly tax return, by the last day of the month that follows the end of the quarter. For example, if your quarter ends in May, you must file a return by June 30 to avoid 941 late payment penalties. If you fail to file your quarterly tax return by the deadline, the IRS will assess a series of penalties.
Late Filing Penalties
For each month or partial month that you are late filing Form 941, the IRS imposes a 5 percent penalty, with a maximum payroll tax penalty of 25 percent of the unpaid tax due. The IRS also adds a 0.5 percent tax for each month or partial month you are late in paying the tax.
How to Pay Late Payroll Taxes
To pay late payroll taxes, use the Electronic Federal Tax Payment System, or EFTPS. If you do not have an account, you can create one by providing business details including employer identification number, bank account information, and routing numbers at eftps.gov/eftps/.
Once the IRS has verified your information you will receive a letter five business days later. You can then make your late payment including penalty using Form 941. To avoid penalties for late payroll taxes, you need a tax relief accountant who can assess your financial situation and create the best tax solution for you. Even if you are not eligible for penalty abatement, you can settle your payroll tax debt for less than the original amount with an Offer in Compromise or by negotiating a payment plan.
The Dreaded Letter from the IRS
If you have received a tax notice, IRS letter, audit notice, or other tax correspondence from the IRS, a state agency, or a local agency, it can be difficult to know what to do next. We frequently represent clients with IRS penalties, interest, and taxes due, and we can help you, too. We have worked on items such as IRS Offers in Compromise and Penalty Abatements.
The Tax Help You Need
If you are ready to face your tax problems, we are here for you. We can help you relieve that huge stressful burden so you feel lighter and free from all that stress. Do not face your tax issues alone. Our trained and certified tax professionals work diligently to find the best outcome we can on your tax issues. Turn to the Showalter CPA Firm, and let us put our tax resolution services to work for you. Call now for more information or to schedule a consultation at (605) 646-3585.
This one gets so many businesses in trouble. The penalties and interest added for not paying your payroll tax and filing your payroll tax returns can be severe. The IRS is relentless when collecting back payroll taxes. The IRS is most aggressive when it comes to these types of taxes. If Payroll Taxes are not paid, you are putting your income, assets, and business reputation at risk. But this can be corrected. Didn't file forms 941 and 940? We can take care of this for you.
If these taxes (Payroll Tax 940/941) are neglected long enough, your business may be forced to close and all of your assets can be seized and auctioned off to satisfy the debt. We can prevent this from happening. Regardless if the business is closed, you must make arrangements to pay the taxes. Do not put this one off.
We have many years of experience dealing with payroll tax debt issues. This one cannot be ignored. Call us for a free tax consultation 605-646-3585.
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