What Do I Need to Know About Payroll Taxes for My New Business?

//What Do I Need to Know About Payroll Taxes for My New Business?

What Do I Need to Know About Payroll Taxes for My New Business?

 

If you think you might know everything you need to know about payroll taxes for your new business, but you’re not sure, be careful and be sure you’re adequately prepared. What you don’t know could cost you a lot of money and possibly even cause you to lose your business, due to the Internal Revenue Service, if you haven’t paid everything you owe.

If You Are a Small Business Owner, the IRS is Likely to Come After You

This is because the government considers small businesses the biggest source of unpaid payroll taxes. While the government may investigate small businesses at any time, because of the few bad business owners who haven’t paid their fair share, the IRS will especially investigate such businesses during a downturn in the American economy.

Aggressive Collection Tactics by the IRS Can Shut Businesses Down

The aggressive tactics by the IRS can allow the government to padlock your doors, shutting you down, without a court order. It can also seize your machinery and equipment. The power and authority of the IRS in collecting past due payroll taxes seems almost limitless. The IRS can even contact your customers and use its powerful levying authority to intercept any money they may owe you. If your accountant has found payroll tax issues, take action immediately, before it’s too late.

Even Honest Mistakes Can Cost You Big Money

You are honest, and they people who work for you are too, but even honest mistakes can carry stiff penalties, because the IRS focuses tax compliance enforcement on small businesses like yours. The few dishonest small business owners have caused problems for you and other business owners like yourself. For that reason, if you have thought about discounting the importance of careful bookkeeping and payroll taxes, don’t do it. Make sure your accountants, bookkeepers, and all responsible for money at your company are competent.

Keep Your Hands Off Your Company’s Payroll Taxes

One of the biggest mistakes a business owner can make regarding payroll taxes is to not keep his hands off. You must leave the funds alone. You can never legally use payroll taxes for any other purpose or borrow against them. The money doesn’t legally belong to you. They are a part of your employees’ paychecks.

Make Certain Any Bonus Checks and Overtime Have the Correct Dates

Did you know there are major tax implications regarding the timing of bonus checks and overtime payments? The payroll tax due dates must be correctly aligned with the timing of these payments. If they are not, you could owe fines and penalties.

Any Penalties You Owe Can Cause Huge Debt in a Hurry

The penalties for payroll mistakes can create a huge tax debt and add up quickly. These penalties can make your total tax bill much bigger. It doesn’t matter whether your small business is a sole proprietorship, corporation, or LLC, you could lose your business because of these tax payments. You could owe penalties for failure to deposit, failure to file, and failure to pay. This is as much as 33% plus interest if not paid in just 16 days after filing the 941 (payroll tax return) past the due date!

It is a Crime to not File or Pay Your Payroll Taxes

The IRS can present your case to the Criminal Investigation Division and even the Department of Justice if it can prove that you intentionally did not file or pay. The threshold for proof is very low!

If You Are Going to be Audited, Get Professional Help!

To not do so, would be like going to court without a lawyer.

The IRS Can Come After You Personally

The IRS can come after business owners or shareholders individually to collect any taxes owed. It can use the Trust Fund Recovery Penalty. It is the only entity that has the legal authority to go after individuals in a business individually.

You Are Not Necessarily In Trouble if You Owe Back Taxes

It depends on the circumstances, but owing money does not automatically mean you are in trouble, if you deal with the IRS honestly and obtain professional help immediately upon discovering your problem.

Know the Tax Laws Before You Cross State Lines

If you have employees in more than one state, payroll taxes are much more complex. Each state has its own rules and regulations regarding payroll taxes, their distribution, handling, and calculation. There are advantages for hiring employees in more than one state, but know the tax liabilities before doing so. Will the additional taxes you owe outweigh the benefits?

For more information, feel free to contact us.

 

By | 2017-01-13T11:13:12-07:00 January 13th, 2017|Blog|Comments Off on What Do I Need to Know About Payroll Taxes for My New Business?

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