Payroll Basics

Payroll Taxes are taxes that an employer withholds and pays on behalf of their employees. The amount withheld depends on the worker’s Form W-4.

There are two types of Payroll Tax Deductions, Statutory Payroll Tax Deductions and Voluntary Payroll Tax Deductions.  The law requires withholding Statutory Payroll Tax Deductions from an employee’s paycheck.

This money pays for projects at both the federal and state levels such as Social Security, Medicare, as well as programs to benefit retirees, the disabled, and children of deceased workers.

Meanwhile, an employer can only withhold Voluntary Payroll Tax Deductions if an employee gives them permission.  These can cover a variety of employee benefits such as health or life insurance premiums, retirement plan contributions, and employee stock purchase plans.

They can also be used to cover things like meals, uniforms, union dues and other job-related expenses.  Depending on the type of benefit it is covering voluntary deductions can be paid with pre-tax dollars or after-tax dollars.

types of payroll taxes

Payroll Tax Requirements for Businesses

Businesses have an obligation to file their payroll taxes quarterly in March, June, September and December. If your business is small enough, you may be able to get an exemption, so you only must file annually.

You can file electronically with IRS or, make deposits and necessary forms in person to the nearest Federal Reserve Bank or other authorized financial institution. In most countries, including the United States, Federal authorities, as well as many State governments, collect some form of Payroll Tax.

The IRS determines when a business is required to make deposits for payroll, they can update this each year depending on the annual payroll of the firm.

Payroll Tax Help from Tax Pros

Behind on Your Payroll Taxes?

If you are behind on your Payroll Taxes, the IRS will come after you more aggressively than if you are behind on your personal taxes. Payroll taxes are funds you hold in “trust” that belong to someone else.

The IRS views not paying your Payroll Taxes like stealing. Because of this you aren’t only putting your business at risk, but you may be personally liable to the IRS. There are various penalties from the IRS when you don’t file your Payroll Taxes on time.

First, there is failure to file penalties; these require you must pay a percentage of what you owe when you finally file your Payroll Taxes. Once you have filed, if you haven’t paid yet, the IRS will levy another penalty for not paying within the time frame listed on the notices they sent you.

Basics of Payroll Taxes

The next thing the IRS will throw at you is Tax Liens and Levies. A Tax Lien means that the IRS gets to have the first pass at your assets if you happen to file bankruptcy. A Tax Levy is where you extremely behind on your taxes and the IRS can pick any day and time and take all the money out of your bank account. This one reason you shouldn’t avoid paying your taxes.

Finally, don’t forget about interest, you also must pay interest on all unpaid balances and unpaid penalties! All this money could add up to thousands of dollars after all the fees the IRS throws at you!

Let Tax Pros Plus Help You Out!

Don’t wait, come in and work with us TODAY! Just because you avoid your unpaid Payroll Taxes doesn’t mean they will go away. If the IRS figures that a business can’t pay its past due taxes, it may go after individuals who the IRS feels is responsible. This means YOU! Don’t let this happen, let Tax Pros Plus help you out! We may be able to help you avoid the bank levies and liens associated with back Payroll Taxes. Don’t wait one more day, resolve your tax issues now!

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