Employers are required to withhold payroll taxes from the wages earned by their employees and are required to forward these withholdings to the IRS. Under the Internal Revenue Code, an employer is required to collect, account for and pay taxes that have been withheld from employees’ wages. An employer is required to withhold Federal Income tax, Social Security tax and contribute a portion of Social Security tax as well. These withholdings must then be deposited at a bank for transfer to the IRS. Additionally, if the business has employees with an active payroll, the business is required to file quarterly a Form 941, Employer’s Quarterly Federal Tax Return, and annually a Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return.
Failing to properly file and pay payroll taxes is a serious matter. If the employer fails to timely file and pay payroll taxes, the IRS is authorized to collect these taxes from the business or even a person or persons who are responsible for withholding and paying these payroll taxes to the IRS. The IRS typically employees Revenue Officers to work on collecting payroll taxes and to investigate the financial health of the business. Failure to correct a delinquent payroll tax matter could result in the closure of the business and liquidation of the business assets.
Get Free Tax Help Now
YEARS OF COMBINED EXPERIENCE*
TAX DOLLARS SAVED*