What SMBs Should Know About Payroll Tax Obligations
For business owners keeping up with tax obligations can be stressful. With local, state, and federal taxes sometimes things call fall through the cracks. In regards to payroll taxes you should understand what is required when withholding payroll taxes from employee paychecks. If these obligations are ignored or completed incorrectly it could mean trouble for your business. Here’s some other things you should know as a business owner about pay roll taxes:
Small businesses are more likely to be subjected to augmented tax compliance enforcement. The IRS tends to focus on small business when it’s time to collect taxes. This is because there is such a large risk of tax evasion whether done purposely or not.
This can lead to the loss of your business because the IRS can be very aggressive in how they employ collection of past due taxes. They can appropriate anything they need to such as any tools or technology used to run your business, and do not require any court approval to do so.
Once you fall behind on your taxes it becomes a snowball effect and it will get harder and harder to catch up especially when the penalties are rapidly tacking on. Not only does neglecting to properly file your payroll taxes potentially lose you your business it is also a federal crime.
Borrowing is also a crime. Do not borrow from your employee’s payroll taxes if you are in need of extra money for other expenses. The money does not belong to the business, and needs to be collected by the government.
Figuring out payroll taxes can get complicated. Efficient bookkeeping is crucial for the payroll tax process. Everything discussed above is 100% avoidable. You do not have to be in this alone. To ensure that any of these things do not happen to you or your business it is extremely beneficial to hire a payroll tax service to complete your payroll taxes promptly and effectively. A payroll tax service will help you immensely when it is time to fulfill your tax duties as a business owner.