Posted by Income Taxes and Bookkeeping LLC

Things small business owners should know about payroll tax problems

Things small business owners should know about payroll tax problems

As an owner of a small business your main aim is to probably get your business growing at a steady rate in the market so that you can pay all your employees on time. Failure to do so may land you in trouble with the Internal Revenue Service who has very strict rules regarding the same.

If this is your first time paying taxes as a small business owner or if you are not sure about the taxes you have to pay, you should use the services of a tax preparation company like the Income taxes and bookkeep in Winchester, IN.

How To Avoid Landing In Trouble With The Internal Revenue Service

If you do not pay your employees on time as an owner of a small business owner, you may face severe penalties from the Internal Revenue Service. To avoid such a situation, you should keep the following things in mind while filing your tax returns:

Payroll penalties can add up

The Internal Revenue Service will make you pay a penalty if you fail to file your payroll tax returns, deposit them and pay them on time. These can amount to a huge percentage if ignored for a long time. In some cases, the penalty has added up to 33 per cent of the tax amount you owe along with the interest.

Thus, it is best to take the help of the tax preparers from the Income taxes and bookkeep to file, deposit and pay your payroll tax returns on time so that you can avoid such huge penalties.

Adhere to the due date

Once the payroll check date is announced, you must make sure you pay it within a period of three days or you could face severe penalties. Let the tax preparers in Winchester, IN file the income tax withheld, Medicare taxes and social security within the due date.

Small business owners are always under the scanner

If you withhold income tax, social security benefits and Medicare taxes from your employee’s paychecks, the Internal Revenue Service can use the Trust Fund Recovery Penalty (TFRP). This penalty means that you are liable on your own to pay these taxes and have no corporate protection to back you. The Internal Revenue Service can use it when and as they feel appropriate.

Avoid criminal penalties

Don’t think that just because you have a small business with two or three employees, the Internal Revenue Service will ignore you. They are very strict about payroll taxes; no matter how big or small the company. 

If the Internal Revenue Service gets to know that you intentionally did not file and pay the payroll taxes, they can freeze your bank accounts. In fact, whosoever is responsible for not paying the taxes, whether it is the owner or accountant, they will come under the scanner and will face an investigation.

The Internal Revenue Service can access all your bank documents, statements, cancelled checks to prove that you have not paid these taxes. If the Internal Revenue Service decides to invoke the Trust Fund Recovery Penalty (TFRP), not only will your account be frozen, but the accounts of your employees will be frozen as well.

Pay your taxes on time

The only advice that can be given in such situations is to try and not outsmart the Internal Revenue Service and pay all your tax returns on time. If you withhold any such tax from the Internal Revenue Service, they will penalize you and may even freeze your bank accounts.

If the penalties add up, you may land up in debt and thus may be unable to operate your small business properly and may have to shut it down.

To avoid such extreme situations, you can hire the services of trained and certified tax preparers from the Income taxes and bookkeep.

These tax preparers in Winchester, IN will make sure you have filed all your payroll taxes within three days of the due date and will ensure that you have covered all aspects and paid the required amount.

They will also help you understand what all taxes you will have to pay as an owner of a small business and try to get you as many deductions as possible. If you do face any penalties, these tax preparers can come in handy on how to pay the fine as soon as possible.

You can click on the profile below of the Income taxes and book-keep company that has some of the best Winchester IN tax preparers. These qualified professionals will help you keep your business on the right track and ensure that you face no tax woes.

Income Taxes and Bookkeeping LLC
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