Payroll Taxes…Pay Them!
Posted by segacor on May 5, 2008
Payroll taxes include a number of different taxes that must be withheld from wages by all businesses that have employees. Small businesses that employ persons other than the owner or partners are required to withhold payroll taxes from the wages paid to employees, remit these taxes to the Internal Revenue Service (IRS), and make regularly scheduled reports to the IRS about the amount of payroll taxes owed and paid. Businesses are not required to withhold payroll taxes on wages paid to independent contractors. It is important to be aware of the distinctions between independent contractors and employees, however, because the penalties for misclassification can be severe.
Many small businesses fall behind in paying these taxes or filing the associated reports at some time during their existence. This is a very bad practice, however, because significant interest and penalties apply for late payment or nonpayment of payroll taxes. In fact, the Trust Fund Recovery Penalty allows the IRS to hold a small business owner or accountant personally liable for 100 percent of the amount owed, even in cases where the business has gone bankrupt.
If you are a procrastinator or just plain hate paying taxes, consider outsourcing your payroll to a Professional.
