| If you are a business owner, whether small or large, | | | | you are penalized at 2-15%. These are just the |
| you need to be aware of the importance of paying | | | | penalties; you also will have to pay interest at the |
| your payroll taxes and filing your payroll tax reports. | | | | current interest rate. You also put yourself as owner, |
| While you hear a lot in the news about people who | | | | and anyone else who may be held responsible |
| don't file and/or don't pay their income taxes, you don't | | | | (including your bookkeeper if he or she can sign |
| hear much about an equally common problem of | | | | checks or is determined to have control over what bills |
| businesses not paying their payroll taxes. | | | | are paid),at risk for the Civil Trust Fund Penalty or |
| Some business owners mistakenly believe they can | | | | Trust Fund Recovery Penalty. |
| use the money they have taken out of employees | | | | The Trust Fund Recovery Penalty is a penalty that |
| paychecks to run their business. In the short run, that | | | | can be assessed to an individual, even if your |
| might look like a viable solution. In the long run, it is a | | | | company is a Corporation. You as an individual are not |
| recipe for disaster. Of all the types of unpaid taxes, | | | | protected by the company's corporate status from |
| the IRS pursues this type with the most persistence | | | | this penalty. The trust fund portion of the payroll taxes |
| and offers the least amount of flexibility in repaying | | | | due (Federal Withholding, and FICA-the employee |
| once you are behind. | | | | portion) can be assessed to you as an individual. What |
| It is important to remember that you have taken the | | | | this means is that once this penalty is assessed, the |
| Federal Withholding, Social Security and Medicare | | | | IRS can come after your personal assets like bank |
| deductions from your employees' pay. This is money | | | | accounts and personal property and/or file liens on |
| you are holding in Trust prior to payment to the IRS. | | | | your personal property, such as your home. |
| You also have a portion of the FICA and Medicare | | | | One additional piece of important information: Be sure |
| due as the employer's portion of the total payroll taxes | | | | when you are making payments on past due payroll |
| due. The seriousness of neglecting to pay these taxes | | | | taxes that you specify that you are paying the Trust |
| to the IRS cannot be emphasized too heavily. Not | | | | Fund portion first otherwise the IRS will assume the |
| paying these taxes is considered stealing, and the | | | | payment goes to the non-Trust Fund portion. It is |
| consequences are extremely serious. | | | | always in your best interest to pay off the Trust Fund |
| If you do not pay these taxes on time, you incur | | | | portion first. The employer portion of the FICA cannot |
| penalties and interest. The same is true of not filing | | | | be assessed to the individual; it remains a debt of the |
| your 941 reports on time. The penalties for not filing | | | | company. |
| your 941 reports on time vary beginning at 5% and | | | | If you have found yourself in trouble with borrowing or |
| increase each month by an additional 5% until they | | | | paying your payroll taxes, resolve the problem |
| reach 25%. There is also a failure to pay penalty that | | | | immediately by contacting a reputable tax debt |
| starts at 0.5% and can also go up to 25%. | | | | resolution firm. |
| If you do not make your Federal Tax Deposits on time, | | | | |