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8 Tips for Avoiding Payroll Tax Issues

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Avoid payroll tax problems with these tips

Paying payroll taxes is an important part of running a business and can help you avoid future payroll tax issues as well as save countless headaches and thousands of dollars in penalties. Since the IRS expects you to manage and pay your employees' payroll taxes, it is your responsibility to make sure these are done. To help you avoid payroll tax issues and the resulting IRS penalties, we put together 8 tips.

IRS takes collections very seriously

The IRS is very aggressive when collecting unpaid payroll taxes. If a business fails to pay employee payroll taxes, the IRS can send out agents to seize that business' assets.

Tax penalties can add up

IRS tax penalties can quickly add up. They do this to help deter businesses from holding any payroll tax payments. It is important to not miss any payroll tax deposits, because the IRS will hold you responsible.

You must pay payroll taxes

The IRS makes no exception for business owners who avoid paying payroll taxes for their employees. It is the company's responsibility to pay the taxes on time.

Small businesses are closely monitored

The IRS closely watches small businesses. All tax dollars are important, and with thousands of small businesses in the U.S., failure to pay employee taxes can add up to big losses in tax revenue.

The type of business structure does not matter

No single business structure is immune from paying employee payroll taxes. The business owner and anyone involved with processing payroll are responsible for making sure that the payroll taxes are paid on time.

Do not borrow from payroll taxes

It is illegal to borrow money from employee payroll taxes. There are no exceptions.

Legal advice is important

If you have questions about payroll taxes, it is important to talk to a legal tax professional. The IRS holds the business owner responsible for making sure that the business is following the rules and regulations. Failing to do so will cost a business.

Taxes must be paid

There is no way to get out of paying payroll taxes. If there is a dispute, you will need to spend money on a lawyer and time away from running the business. In the long run, it is easier to make sure that you pay your payroll taxes on time rather than trying to find ways to avoid paying them.

Executive summary

It is the responsibility of the business and the people who handle its payroll to be in compliance with payroll tax laws. The IRS makes no exceptions for incompetent or ignorant business owners. Making sure the IRS rules are followed will help you avoid huge penalties and even a possible business shutdown.

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Cindy McSwain

Senior Vice President
Outsourcing Services

Cindy McSwain leads AGH’s outsourcing services group. Her team provides payroll, accounting, funds disbursement, controller, and other financial outsourcing services to numerous clients throughout the U.S. Prior to directing the outsourcing group, Cindy served AGH’s audit clients for 10 years, working with a wide range of middle-market, closely held and family-owned clients.

Her current clients cross many industry sectors, including manufacturing, distribution, restaurants, retailers, medical, and not-for-profit. She has participated in numerous SEC filings and public registrations and has experience in mergers and acquisitions. Cindy is a certified public accountant and a member of both the American Institute of Certified Public Accountants and the Kansas Society of Certified Public Accountants.

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