Payroll tax is a major contributor to the IRS’s revenue, and it is rather easy for the agency to collect taxes directly from employers than from millions of employees individually. You, as an employer, are legally bound to deduct a percentage from employees’ salary and pay to the IRS along with all the required information about employees in Fort Wayne, IN. This helps the IRS collect individual taxes collectively and also maintain the tax records.
Unlike individual taxes, failing to pay or withholding payroll taxes can put you in danger very quickly. The amount of payroll can be very small or huge depending upon the size of your business, so the IRS moves quickly against the delayed payments. Five days latency on payroll can cost you a 2% penalty.
Major penalties can range from a 15% fine on taxes to business levies or put you behind bars. Before we discuss the process to resolve the unfiled payroll taxes, it is important to understand that you are not alone in this. A considerable number of businesses fail to file and pay the payroll taxes on time. Furthermore, the IRS doesn’t want to harm you or your business by putting heavy penalties; they are just after the money you owe to them. So avoiding the latency on payroll taxes is the best policy than finding the solutions to problems afterwards.
Steps to Resolve the Unfiled Payroll Taxes in Fort Wayne, IN
You can resolve the unfiled payroll taxes with the help of the following steps;
Contact IRS through Professionals:
The first and most important piece of advice is that you do not contact the IRS regarding unfiled payroll taxes alone. The IRS agent can get into your head by talking in technical language, and you may be implicated by your own mistake. You can face additional scrutiny, which can enhance the number of fines for your business.
Don’t fall behind current deposits:
If you have unfiled taxes on your balance and think that ignoring paying the current payroll taxes is not a big deal because you are already behind payments for previous taxes, you are very wrong. If you are paying the current taxes on time, it means that you are a law-abiding entity and are not habitual defaulters.
Be transparent to IRS:
When the IRS demands any documents or tax records, we advise you to be as transparent as required. Concealing the information can lead to more problems for you.
Finalize the Agreement:
The best way to resolve the problem once it occurs is by signing an agreement with the IRS. The IRS offers many options to resolve unfiled payroll taxes, like streamlined installment agreement, guaranteed installment agreement and non-streamlined installment agreement. You can also avail an offer in compromise option if you satisfy the IRS agent that it is impossible for you to pay the previous taxes and stay afloat.
Follow the deadlines:
Once you have a deal with the IRS, follow the payment deadlines as mentioned in the agreement. It is not wise to miss the installment deadlines too.
Although there are plenty of ways available under law to resolve unfiled payroll taxes, the best approach is to avoid them in the first place. But once you are in such a situation, try to come out of it as early as possible.
Zee Maq is a content writer who specializes in writing business and finance content. She has nine years of experience and loves to provide problem-solving content to help people tackle challenges in their everyday lives.