It’s fairly common for businesses – no matter what size – to struggle with some sort of 941 tax issue or another. Even companies that use good payroll software to sort out their entire payroll related taxes are still prone to errors. The IRS implements strict guidelines when it comes to filing and paying payroll taxes in a timely manner. Are you a business owner with 941 payroll tax problems? It’s going to be difficult to obtain tax relief if you have been found guilty of deliberately failing to meet your obligations.
Late filing and payment
Late payment of payroll taxes causes your business to incur penalties and additional fees, which can be a huge problem especially if your business is already contending with cash flow issues to begin with. Small businesses, for instance, rarely have ample capital to run their operations, so when unexpected fees like these come up, cash flow is compromised.
The issue gets worse if you fail to file your payroll returns on time, as you’re incurring penalties for that error as well. Each monthly delay on filing can cost you 5% of your whole tax debt – and that doesn’t include other penalties resulting from late payments. Tax help usually comes in to negotiate these fees but unless you get it from a reliable and licensed professional, you wouldn’t be able to get anywhere as far as tax relief is concerned.
Trust fund recovery penalty
As an employer, it is your responsibility to deduct federal tax dues from your employees’ paychecks and pay it to the IRS on time. Failure to do so will result in a 100% penalty and enforced collection on the responsible person, the owner of the business or an officer of the corporation. The IRS can also put a levy on your company’s assets, including bank accounts and receivables until you pay for the payroll tax debt.
Handling payroll tax errors
The best ways to avoid payroll tax problems is to timely file and pay your taxes. Make sure that your payroll is current. You may want to source this work to a professional so you make sure that all the payroll taxes and withholdings are properly accounted for.
It’s natural to make mistakes. To avoid messy payroll tax problems, you want to review your records every year and be on the lookout for these errors. Doing so will help you handle discrepancies as they come instead of tackling all of them two to three years later, when errors have gotten out of hand.
Know your rights!
In order to get the best tax relief possible, it is important for you to know what your rights are. The IRS will then assess you penalties according to your willfulness – that is, your awareness that a lapse in payment has taken place. It pays to have a tax professional with you so you can assess whether or not you’re eligible for certain tax relief help options such as installment payments, offer in compromise, and other alternatives.