Payroll Taxes

The penalties for not withholding payroll taxes can be the most severe and devastating. Payroll tax penalties can not only affect the business, but it can affect the business owners personally. If you are facing pay roll tax penalties, then you need the assistance of a tax lawyer or tax professionals that can stop the penalties and stop tax collection efforts against you and negotiate your tax debt to a number that is reasonable and attainable.

Call today and speak with one of our tax professionals to see how we can help you with your payroll tax penalties.

What is Withholding Tax?

In the United States, withholding tax applies mostly to employment income. Withholding of tax is required of every employer, to collect tax payments out of the employee or contractor's salary or wage. The withheld taxes are then paid by the employer to the taxing authority which is applied to the account of the employee. This is also referred to as Payroll tax, which is assessed by the Federal government as well as the local government. It imposes an obligation to the employee as well as the employer towards the State. Employee is required to pay income tax to the State and the employer is required to withhold such tax in the payroll of every employee. Payroll taxes are actually the income taxes withheld from every employee. The employer is required to collect from the employee the income tax as well as the social security tax and medicare tax which are also known as FICA taxes. To know more about income tax and withholding tax, talk to our tax resolution experts today.

Payroll Tax Collection and Reporting

In addition to the Payroll tax withheld from employees’ wages, the employer is also required to pay a matching amount of social security and medicate taxes for his employees and to pay State and Federal unemployment taxes (SUTA and FUTA). This federal income tax system is a "pay-as-you-go" system that requires salary paid earners to pay tax as they earn income. The tax is withheld, collected and remitted by the employer to the Internal Revenue Service (IRS) or deposited into the designated bank on a periodic basis as prescribed by the IRS. Failure to comply with this obligation to withheld payroll taxes and report the same to the taxing jurisdiction, the employer may be subjected to penalties or even criminal prosecution. To calculate employees federal income tax liability subject to withholding of tax, employees has to complete IRS Form W-4. To avoid penalties and unnecessary tax liabilities, contact our tax debt consultants.

Payroll Tax Liability includes Penalties and Criminal Prosecution

Payroll taxes are imposed on employees and employers, but the employers are tasked to collect from the employees the tax due as withholding tax and have the obligation to turn over the collection to the taxing authority. Taxes collected have to be reported quarterly or annually. Payroll tax is not a final tax, but merely prepayments. Employees are still required to file an income tax return, assess his income and tax due and claim the amounts withheld as payments. Payroll tax withheld are due by January 31st and February 28th or by March 31st (if filed electronically) following the calendar year in which salaries or wages are paid. The employer is required to file IRS Form W-2 for the remittance which also constitutes proof of the withheld tax for the employees. Payroll tax obligation can be very tragic if neglected, non-payment, delayed payments or failure to remit collection on time will bear corresponding legal consequences which include imposition of penalties, closure of business and forfeiture of properties.

Don’t Be a Victim of a Payroll Tax Liability

For clarification on your payroll tax liability, call Tax Solutions Network for a free assessment of your tax liability. Let the tax professionals protect your interest. (877) 4Tax-Bills