| As an employer, you must pay employment taxes if | | | | Cash flow crunches are an inevitable event for |
| you have employees. Fail to pay and the IRS will rain | | | | practically every business. So, what happens if you |
| all over your parade. | | | | make a late payment for employment taxes. Unless |
| Penalties | | | | you can show a reasonable reason for the delay, the |
| If you have employees, you absolutely must deduct | | | | IRS is going to penalize you. |
| and withhold various taxes from the paychecks of | | | | Late payment penalties range in amount depending on |
| your employees. Since you are deducting money from | | | | the delay. If the delay is less than six days, the penalty |
| the employee's paycheck, you are handling their funds. | | | | is two percent. Delay for six to 15 days and you are |
| This fact is very important to the IRS and it places | | | | looking at five percent. More than 15 days in delay is |
| great emphasis on any failure to deposit employment | | | | going to push the penalty to 15 percent. If you delay |
| taxes. | | | | this long, the IRS will be peppering you with penalty |
| If you fail to pay employment taxes, you will be subject | | | | notices telling you where you stand. |
| to a 100 percent penalty. Yes, 100 percent. Known as | | | | In Closing |
| the "trust fund recovery penalty", the penalty is | | | | Whatever you do, make sure you deposit employment |
| assessed against the person responsible for paying | | | | taxes with the IRS in a timely fashion. Take a moment |
| the taxes, not the entity. The person can be the | | | | to think about the worst thing you have ever heard |
| owner, corporate officer or other "responsible person." | | | | done by the IRS. If you fail to pay employment taxes, |
| In short, a business entity is not going to protect you | | | | the actions taken by the IRS will be ten times worse |
| from the wrath of the IRS. | | | | and you will be the one telling horror stories. |
| Late Payments | | | | |