Facts About Payroll Taxes

If you are an employer, you absolutely have to pay payroll taxes. The Internal Revenue Service says that it is shorted $12 Billion annually in payroll taxes. It has become aggressive in its tactics to collect this revenue.

As an employer, you must pay them; there is no way around it. It is your responsibility to make all payroll tax deposits.
The IRS will get your payroll taxes or they will take your business, seize your assets, and come after you personally.

IRS fines for missing payroll tax deposits are immediate and the penalties add up fast. If you miss a payroll tax payment, you want to jump on it as soon as possible. The IRS can use liens against your bank accounts as just one collection method for missed payroll taxes.

The IRS is particularly watchful of small businesses. In the past, many small businesses thought they could get away with ignoring these taxes more easily than the big businesses. The IRS caught on and is now on the watch for businesses small and large alike. They are one of the IRS's biggest compliance issues.

Borrowing against your payroll taxes is illegal. You cannot use your employee's withholdings for anything other than paying the IRS. If you are found to be borrowing against them, you risk loss of your business, your assets, and your freedom. Employers are often jailed when caught in this type of violation.

No method exists to resolve payroll tax disputes other than paying up. The IRS can shut down your business and seize your assets for failure to pay payroll taxes, and no court order is needed.

No matter your business structure, you can become personally responsible for unpaid payroll taxes. From the biggest CEO to the smallest shareholder, if your company fails to pay payroll taxes, you can be held personally liable.
The IRS can assess the Trust Fund Recovery Penalty. The money you collect for payroll taxes is the withholding from your employees. So, you are technically holding this money in trust to turn over to the IRS on behalf of your employees. The Trust Fund Recovery Penalty is assessed against your company when you fail to hand that tax money over in a timely fashion.
The Trust Fund Recovery Penalty is assessed at 100%. In other words, if you have $5000 in unpaid payroll tax, the Trust Fund Recovery Payment will be assessed at $5000 on top of the $5000 you owe. The Trust Fund Recovery Penalty doubles your payroll tax liability.

If you do find yourself in trouble with payroll taxes, you will need to contact a tax resolution specialist swiftly. If you contact them in time, they may be able to help you pay your payroll taxes to date and avoid the Trust Fund Recovery Penalty.

If you are employing someone, you need to deduct payroll taxes from your salary. These taxes are to be paid back to IRS. Many times you may not know exactly how much should you collect. Sometimes you may miss out on paying them to IRAs after collection. IRS takes this very seriously and there are severe penalties for such defaults. Always keep up to date on your payroll tax obligations. Chintamani Abhyankar provides useful advice.

Chintamani Abhyankar, is a well known expert in the field of finance and taxation for last 25 years. He has written many books explaining inside secrets of the magic world of personal finance. His famous eBook Stop donating your money to IRS which is now running in its second edition, provides intricate knowledge and valuable tips on personal finance and income tax.