Every business in the United States must report employee payroll tax information on a quarterly and annual basis to the IRS. Using this information, the government reports the amount of 941/940 employment payroll taxes that are either withheld from employees and how much they owe the IRS. If a business fails to report its payroll taxes, it may have payroll tax problems. In this blog, we cover all you need to know more about payroll taxes.
Payroll/Employment 940/941 Taxes Relief
According to the US tax code and the IRS, a business operating in the country must pay Employee Federal Income tax, FICA, and Federal Unemployment Tax, which together comprise business payroll tax to the IRS each year. Businesses can seek help from an IRS tax attorney to file their employment payroll taxes. Let’s look at what the three taxes entail:
Employee Federal Income Tax – Employers need to withhold a percentage of taxes from their employee wages and report the amount to the IRS each quarter using the IRS Form 941.
FICA – Employers should also withhold a percentage of each employee’s wages for Medicare tax and Social Security Tax and add a matching amount using the same IRS Form 941.
Federal Unemployment Tax – Employers must also pay unemployment tax to the IRS every quarter using the IRS form.
Related Blog: 3 Things you Must Know about IRS Appeals
Collecting and Reporting Payroll Taxes to the IRS
All businesses should make sure that they collect payroll taxes, file them using the IRS Form 940/941, and submit it on time. Regardless of the number of employees a business has, the IRS does not offer an exception for withholding income taxes and FICA taxes and reporting them to the IRS on time. In the event that a business has a large number of employees, resulting in complex returns, an IRS tax attorney can help.
Consequences of not Paying Employment 940/941 on Time
The IRS (Internal Revenue Service) is an extremely powerful government agency that has the authority and power to carry out its tax collecting duties. If a business fails to pay employee payroll taxes, the IRS can
- Levy its bank accounts
- Audit the company’s tax account to file criminal charges
- Audit tax records
- Impose penalties and fines
- Put tax liens on the owner’s properties and assets
- Seize any or all the business assets
Related Blog: Answering 5 FAQs about the IRS Bank Levy Process
Remedying Payroll/Employment Tax problems
Although the IRS has an extremely unpleasant reputation when collecting taxes, there are many ways through which businesses can resolve their Payroll Tax problems amicably when they partner with an experienced attorney as long as they are not involved in any criminal acts. A tax attorney can help businesses negotiate with the IRS or request an Offer in Compromise or installment payment agreement on their behalf. The IRS also has an appeals process that helps the taxpayers appeal IRS decisions.
Although dealing with the IRS can be scary, an experienced IRS tax attorney can help you resolve IRS tax problems and protect you from getting trapped in overwhelming procedures. If you are looking to talk about your tax problems, look no further. Nick has been helping Texans resolve IRS issues for over 20 year. Call the Law Offices of Nick Nemeth to speak with one of our attorneys at (972) 484-0829 or fill out our contact form.