Tax Relief Blog
For business owners, CEOs, CFOs, one of the most common issues is tax problems that deal with your payroll. Unpaid 941 and 940 payroll tax issues are quite common and with the IRS pursuing their collections vigorously, you will need the best in employment tax representation to keep out of trouble. For businesses that have employees, it is highly recommended that you get assistance from a professional tax firm. They can provide the best in employment tax representation that helps keep your business in-line with federal and state tax laws.
Both the 941 and 940 tax returns need to be filed properly if your business is going to avoid potential issues that might otherwise bring in an audit. This is why it is important to understand the importance and difference between the 941 and 940 forms.
Get a free case evaluation today at 877-788-2937. All 50 states.
What is a 941 Tax Form?
This is a quarterly tax return for the federal government. All businesses which have employees are required to withhold their Federal, Medicare, and Social Security tax. This is the form used to report and pay the employment payroll taxes to the IRS.
What is a 940 Tax Form?
This is a form that needs to be filled out annually by any business that has employees. It is a form that reports your federal unemployment taxes which are part of the Federal Unemployment Tax Act. Your business is responsible for this tax and it cannot come from the wages of the employees. This tax is combined with unemployment programs from your state to provide compensation for workers who have lost their jobs.
Why Paying Both Employment Tax Forms Are Important?
Businesses not complying with the 941 payroll form is arguably the most common issue that the IRS faces. Because so much tax revenue is generated by businesses, it is not surprising that the IRS will go the extra mile to pursue collections from this form. It’s little wonder that most employment tax representation is focused on the 941 form itself. In most cases, the payroll taxes are not paid in the correct manner usually due to a miscalculation or misrepresentation which may not be intentional but does have substantial consequences.
Clearing Up Small Issues: Most of the problems that stem from not filling out the 941 form correctly are usually handled by the IRS through notification. When your business is notified of an issue with the employment tax 941 form, you are most often given the chance to clear it up with little or no penalty if you move right away. This is usually a matter of paying the taxes, but there is some clerical error with the form itself.
Not Paying Enough: Naturally, when you do not pay or pay nearly enough of the payroll taxes, then the IRS will have a greater interest in collecting what is owed. Consider that all businesses, even if the employee is either you or your spouse, will have specific obligations in terms of the taxes paid which include the following;
- Federal Taxes
- Federal Unemployment Taxes
- Medicare Taxes
- Social Security Taxes
Remember that it is not just withholding the money and depositing it on the behalf of your employees. You are required to pay a matching amount for some of the taxes that you are required to pay. The 941 form reports the amounts to the IRS on a quarterly basis while the 940 does so annually. To get proper unpaid employment tax representation, you have to understand the differences and withhold the right amounts, so that they are paid on time.
Only experienced payroll tax enrolled agents, tax attorneys and CPAs can effectively represent you before the IRS.
Get a free case evaluation today at 877-788-2937. All 50 states.
Other Potential Issues
Keep in mind that reporting taxes owed is not the same as depositing. The reporting tells the IRS how much you owe while depositing sends them the money in a timely manner. Paying what you owe and not reporting it properly may get you in a little trouble, but it is far less than not paying what you owe the federal government.
Depending on how big your payroll is, you may have to make deposits either once a month or every two weeks. The IRS will decide, so you will have to follow their instructions. If you skip just one deposit, you may find yourself in big trouble. While the IRS may seem friendly at first in trying to collect what is owed, the nice letter will quickly turn nasty as they threaten legal and civil action in terms of fines, penalties, and even jail time in rare cases.
This is why it is advisable to pay on time and to seek out professional help, so you can follow all the rules properly.
Why Hire a Specialized Professional Tax Representation Firm?
For small business owners, CEOs, CFOs, having proper employment tax representation is more than just calling the experts when needed. It provides a service that can help prevent mistakes from happening in the first place, so that you are not in trouble with the IRS or state tax officials. Our professional tax representation firm offers the following advantages;
Advice & Direction: Quite often, small mistakes lead to big issues which is why having a reputable tax firm helps guide your efforts to stay on the right side of the law. By knowing what to do, you can avoid the common issues that bring in an IRS audit.
Overseeing Business Taxes: Looking over your tax returns before they go in means having another set of eyes to spot mistakes. This type of professional assistance means that you can file your taxes with confidence knowing that a knowledgeable, experienced tax firm is there to catch any issues.
Proper Representation: If you are audited, the tax firm stands by your side. Providing you with the right representation that protects your rights. You will have peace of mind thanks to knowing all the options available under the law when a professional tax firm is with you.
Proper unpaid employment tax representation starts by having a team of qualified professionals working side by side with your business and upper management. Do not go it alone, hire a reputable, professional tax representation firm to oversee your payroll taxes and all the tax controversies facing your business.
Only experienced payroll tax enrolled agents, tax attorneys and CPAs can effectively represent you before the IRS.
Get a free case evaluation today at 877-788-2937. All 50 states.
