When you run a business and pay wages to your employees, you are responsible for correctly withholding, depositing, and reporting federal income tax, Social Security, and Medicare withholdings. You are also responsible for paying federal unemployment tax, although there is no employee withholding component of the unemployment tax, only employer payments.
Money withheld for federal income tax, Social Security, and Medicare needs to be deposited either monthly or semi-weekly depending on the size and nature of your business. Federal unemployment taxes, on the other hand, must be deposited on a quarterly schedule, but only if the tax due exceeds $500.
All federal tax deposits must be made via electronic funds transfer. If you are late with a deposit or if you fail to make an expected deposit, you and your business could face a “failure-to-deposit” penalty of up to 15%.
With all of these rules, deadlines, and penalties, it’s easy to see how even the most honest and conscientious business owner could get into payroll tax trouble. You could do everything right, but if you forget to make one deposit on time you could suddenly face a sizable tax penalty. Unless you have the money available to pay the penalty right away, that first “failure-to-deposit” charge could start an unfortunate chain of late payments and mounting tax debt.
This is where the tax experts at Taxation Solutions, Inc. come in. If you’re facing payroll tax issues in Virginia Beach, we can help identify where the problem started, advise you on how to work with the IRS to resolve it, and provide the necessary information and guidance so it doesn’t happen again.
If you need payroll tax relief in Virginia Beach or the surrounding area, don’t wait! You don’t have to figure it out on your own. Give the tax professionals at Taxation Solutions, Inc. a call today.