TAX COLLECTIONS
Payroll Tax Debt Relief Solutions
Have You Missed Paying Payroll Taxes?
We Can Settle Payroll Tax Debts
If your business pays income to employees, you must withhold payroll taxes from their wages, including Medicare, Social Security, and federal income taxes.
You are also responsible for depositing the income tax withheld and filing quarterly payroll tax returns with the Internal Revenue Service.
If you are late depositing payroll taxes or filing your return, the IRS will impose 941 late payment penalties. The IRS can be very aggressive in collecting the tax debt, not only from your business but also from the owners and officers. They can even garnish your business accounts and file tax liens against your assets.
To lift these penalties, you need the help of a tax lawyer with years of experience settling payroll tax debts for employers like you. For a free consultation, contact Delia Law.
When Should You Deposit Payroll Taxes?
- If your business reported a total of $50,000 or less in tax liability for the prior four quarters, you must deposit taxes each month by the 15th day of the following month.
- If you reported more than $50,000 in taxes, you must deposit biweekly (once every two weeks) depending on your payday.
- If payday falls on a Wednesday through Friday, you must deposit taxes by the following Wednesday.
- If payday is Saturday through Tuesday, you must deposit taxes by the following Friday.
Late Deposit Penalties
- If your payment is less than 5 days’ late, the IRS charges a penalty of 2 percent of the unpaid tax.
- Deposits made 6-15 days late are charged a 5 percent penalty.
- If your payment is more than 16 days late, the IRS charges a 10 percent penalty.
- Moreover, you will accrue interest on any unpaid balance.
When & How Must You File?
You must file Form 941, the business quarterly tax return, by the last day of the month that follows the end of the quarter. For example, if your quarter ends in April, you must file a return by May 31 to avoid 941 late payment penalties.
If you fail to file your quarterly tax return by the deadline, the IRS will assess a series of penalties.
Late Filing Penalties
- For each month or partial month that you are late filing Form 941, the IRS imposes a 5 percent penalty, with a maximum payroll tax penalty of 25 percent of the unpaid tax due.
- The IRS also adds a 0.5 percent tax for each month or partial month you are late in paying the tax.
How to Pay Late Payroll Taxes
- To pay late payroll taxes, use the Electronic Federal Tax Payment System, or EFTPS. If you don’t have an account, you can create one by providing business details including employer identification number, bank account information, and routing numbers.
- Once the IRS has verified your information you will receive a letter five business days later. You can then make your late payment including penalty using Form 941.
Finding Crucial Professional Guidance
To avoid penalties for late payroll taxes, you need a tax relief lawyer who can assess your financial situation and devise the best tax solution for you. Even if you are not eligible for penalty abatement, you can settle your payroll tax debt for less than the original amount with an Offer in Compromise or by negotiating a payment plan.
If you want to know how to settle your payroll tax debt, contact Delia Law below for a free consultation. Or call our offices in San Diego at 619.639.3336 and in Los Angeles at 310.494.0100.
Note that the IRS will dismiss late filing penalties if you successfully file a penalty abatement.
