The average owner of a small business typically reports a loss in their first year of operation. But when the IRS steps in, many first-timers do not even stand a chance. It is important to stay one step ahead of the game when it comes to obeying Tax Laws. Small Business owners need to make sure they avoid the common problems Small Businesses run into with the IRS.
Payroll Tax 940 / 941
If you currently own or have owned a business with employees, and owe 941 (employer’s quarterly tax return form) or Employee Withholding Tax then you NEED TO RESOLVE YOUR TAX DEBT QUICKLY . The IRS is most aggressive when it comes to these types of taxes. If Payroll Taxes are not paid, penalties and interest will begin to accrue.
If these taxes (Payroll Tax 940/941 ) are neglected long enough, the business can be closed and all assets can be seized to satisfy the debt. Regardless if the business is closed, you must make arrangements to pay the taxes. This problem will not go away. The IRS will not be deterred and by not paying or making arrangements your personal finances are in jeopardy. Call us and have one of our tax consultants discuss what options are available and what will be the best course of action.
Payroll 941 Penalty
Failing to withhold payroll taxes is the fast track to trouble with the IRS. The penalty for this equals the amount of the taxes that are owed. It is called the 100% Payroll Penalty or “Trust Fund Recovery.” The results of this mishap can be devastating for any Small Business regardless of how successful they are. If you are having issues with payroll taxes, it is possible to resolve these types of taxes, but it may not be easy.