Understanding Payroll Taxes
  • January 25, 2021
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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.

Wrap Up

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) 426-2553 or fill out our contact form.

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What Our Clients Have to Say

Susan WilsonSusan Wilson
03:27 25 Jan 23
I have been very pleased with the solid counsel and guidance that Nick Nemeth has provided me regarding my tax issue. I found him to be honest and straightforward which I appreciated. I was impressed with his relevant experience and knowledge . He has definitely brought me peace of mind during a difficult and stressful time.
Sarah HowardSarah Howard
03:44 14 Nov 22
I would like to thank Mr. Nick and his staff for the superb help that I received from them. My IRS problem was resolved quickly and efficiently. It took 2 visits to convince me that I was over my head. I thought that I could call the IRS, appeal my tax notices and settle on a payment plan on my own. After many phone calls to the IRS, waiting sometimes more than 4 hours with no resolution to speak of, it proved to be extremely difficult and stressful. Revisiting Mr. Nick was a huge wake up call. My account was reviewed, and a payment plan was established with the IRS within a week. I will be forever grateful to the staff who worked on my case and especially to Lorna who listened to me vent while going through this painful process.
00:33 07 Aug 22
I cannot say enough good things about Nick and his team. When I first met with Nick he was up front, honest, friendly and efficient. When I worked with one of his attorneys, Eric B, I was just as pleased. All of the staff there are nice and very helpful. I wish I hadn't waited so long to get help with my issue. Over 6yrs I tried getting through and getting anywhere with the IRS and hardly made any progress. I know this may not be the case for all, and even I thought it would take longer than it did, but 3mos and they had my situation straightened out. I still can't believe it. Thank you thank you THANK YOU for all that you did for me. This is a huge burden gone out of my life now thanks to you. If anyone needs help out there, I know you may not want to shell out more money to get their help but it may just save you in the long run.
Spoilly GirlSpoilly Girl
23:49 03 Aug 22
The Nemeth Law team is exceptional. They treat their clients like a family member who is in crisis. They want you to get the best possible outcome. I really appreciate everything that they did for me. Jake and Ashley had the greatest role in my case and it all turned out for the best for me. Thank you Nick and team for easing my fears and getting me through the long process. I'm truly grateful.
Eddie WaltEddie Walt
19:44 12 Jul 22
During a time in which competent, professional service at a fair price seems to have disappeared, Mr. Nemeth and his team are a refreshing breath of fresh air.From my first phone call to the final settlement of our case with a non-responsive IRS, they under-promised, over-delivered and were in constant courteous contact to make sure we knew exactly what was happening and where we stood.I hope to never need their services again, but, should I receive another friendly letter from the IRS...I know who to call!
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