One of the most laborious tasks for small businesses is managing payroll. But it’s critical that you not only withhold the right amount of taxes from employees’ paychecks but also that you pay them over to the federal government on time.
When a married couple files a joint tax return, each spouse is “jointly and severally” liable for the full amount of tax on the couple’s combined income. Therefore, the IRS can come after either spouse to collect the entire tax — not just the part that’s attributed to one spouse or the other. This includes any tax deficiency that the IRS assesses after an audit, as well as any penalties and interest. (However, the civil fraud penalty can be imposed only on spouses who’ve actually committed fraud.)
If federal income tax and employment taxes (including Social Security) are withheld from employees’ paychecks and not handed over to the IRS, a harsh penalty can be imposed. To make matters worse, the penalty can be assessed personally against a “responsible individual.”
If a business makes payroll tax payments late, there are escalating penalties. And if an employer fails to make them, the IRS will crack down hard. With the “Trust Fund Recovery Penalty,” also known as the “100% Penalty,” the IRS can assess the entire unpaid amount against a responsible person who willfully fails to comply with the law.
Think you pay too much in taxes?
The IRS recently released statistics for the 2016 filing year. See how you compare.
Nobody likes to pay penalties. Even the very word conjures negative images in our minds.
Payment of taxes feels like penalty enough. Failure to pay enough tax to the IRS can result in an underpayment penalty. But you can avoid the penalty.
Everyone loves getting a refund. The only thing better than getting a refund check in the mail is getting a refund direct deposited a few weeks earlier.
Sometimes there is a problem, and the refund doesn't show up when expected. If that happens to you, here's what to do.
There is a familiar buzz in the air this time of year. Some anxiously awaiting their tax refund, others wondering why the heck they aren’t getting a tax refund at all. Even worse, some shocked by the news of a big fat tax bill they weren’t expecting. We all start to believe, or at the very least wonder, if an effective tax strategy is determined by the answer to this one question - “how big is your tax refund?”
Next Step Blog
Our blog is intended as a tool to keep people informed about relevant tax and accounting issues. If you have a question or an idea for a post, let us know!