From small to large, all Texas business owners must pay attention to payroll taxes. Payroll taxes refer to the amount business owners withhold from worker checks for federal taxes, Medicare and Social Security, as well as the employer’s portion of those taxes. Employers must turn those funds over to the Internal Revenue Service, often in a biweekly or quarterly deposit.
The way you pay employee payroll taxes for your business depends on how many employees you have and how much your payroll averages. Failing to make a timely deposit can result is large penalties and interest, and failure to make deposits at all can land you in serious trouble with the IRS.
The IRS considers nonpayment of employee payroll taxes to be serious, because it is tantamount to stealing from employees. You’ve already taken money from employee checks to cover part of that tax — in essence, you are acting as a middle man between the employer and the IRS. Additionally, you owe the remaining portion of the tax as a business.
Whether or not you meant to avoid payroll taxes doesn’t often mean much when it comes to an IRS audit or bill. A simple payroll accounting mistake may still create a situation where your business owes the IRS a large sum including back taxes, penalties, interest and fines. Many businesses cannot afford to make a large payment but find that the IRS seems less-than-willing to work out payment plans.
When such situations arise, seeking assistance from a third party who has experience dealing with the IRS may be a good idea. Third party negotiators often understand how to work with the IRS for the best possible results and might even be able to save your business.