Employment Taxes ? Depositing With The IRS

If your business has employees, you must pay employment taxes. The payment system can be a bit confusing, so this article discusses how to go about depositing employment taxes with the IRS.

Depositing Employment Taxes

To pay employment taxes, you must deposit the money with the IRS. As is typical with tax situations, the payments are not actually made to the IRS. Instead, you must deposit the employment taxes with a federal depository. Moving the burden to the private sector, the IRS requires most banks to act as depositories. If your business has just started hiring employees, ask you bank if they act as a depository. If they do not, you may want to change banks.

To deposit the taxes, you forward money per the bank specifications. You will also need to file a Federal Tax Deposit Coupon, Form 8109, with the deposit. The IRS typically sends these forms to you at the beginning of each calendar year. If you don't receive any, you can download the form from the IRS site or ask your tax professional.

When To Deposit

You must deposit employment taxes either once or twice a month. The IRS will send you a schedule at the end of each year for the subsequent year. As a general rule, you want to file within a few days of each pay period.

Failure To Deposit

Collecting employment taxes is a high priority of the IRS. Since the taxes include money deducted from an employee's paycheck, the IRS views an employer's non-payment as a form of theft. If you fail to pay, you can expect the IRS to come down hard on your business and, potentially, shut it down. In short, make absolutely sure you deposit the employment taxes.

In Closing

There is no other way to put it ? paying employment taxes is a pain. Just make sure you pay them to avoid the wrath of the IRS.

Richard Chapo is with http://www.businesstaxrecovery.com - recovering overpaid taxes for small businesses. Visit our article page - http://www.businesstaxrecovery.com/articles - to read more tax articles.

In The News:

Revenue uptick  The Indian Express
Taxation is too taxing for sub-contractors - People  Construction Week Online India
What’s in Biden’s Tax Plan?  The New York Times
India: Defining 'liable to tax'  International Tax Review
Corporate Taxes Are Wealth Taxes  The New York Times
Here Come the Biden Taxes  The Wall Street Journal

Organizing Your Taxes

Does this scene sound familiar? It's April 7. You haven't... Read More

Slash Tax when Buying a Business

When buying a business, how the "purchase price" is made... Read More

Deducting Points On Home Refinances

Deduction of Refinance PointsAny points that you pay in the... Read More

Tax Trap #2 -- Double Taxation: Isnt Once Enough?

Have you been thinking about incorporating your small business or... Read More

Insider Guides to IRS Audits!

Ever wish that, as a business owner, you knew exactly... Read More

Tax Records - What You Should Keep And For How Long

Many taxpayers are confused about how long they should keep... Read More

Uncle Sam is Ready...Are You? Organizing Tips for Tax Time

Anyone who is closely related to an accountant knows that... Read More

The Internet Tax Man Cometh

Q: I was contacted by the city tax collector to... Read More

Tax Deduction for Alimony Payments? - Yes!

Over 50% of marriages end in divorce in the United... Read More

Navigating The Internet Sales Tax Laws

QUESTION: I have been contacted by my local city... Read More

Understanding Marketing Tax Deductions

Marketing is a necessary expense in running practically any business... Read More

How to Maximize Your Home Business Tax Deductions for 2005

Someone once said, 'the best way to calculate your taxes... Read More

I Havent Filed a Tax Return with IRS in Years, What Do I Do?

In elementary school, kids come up with creative excuses why... Read More

Tax Trap #1 -- Waiting to Incorporate: What A Difference A Date Can Make

NOTE: This is the first in a series of 5... Read More

How To Set Up A Tax-Saving Bookkeeping System

One of the most important, but least understood or appreciated... Read More

Correspondence From The IRS ? Yikes!

It's a moment every person dreads. You pick up the... Read More

Where to Find Tax Breaks for Your Home Based Business

April 15th looms in front of most people every year... Read More

Furnishing Evidence in E-Tax Compliance

Self-assessment relies on taxpayers voluntarily meeting their tax obligations. This... Read More

Tax Audits: What Signs Make You More Likely to be Audited by the IRS?

It's a major fear for most Americans: A notice from... Read More

Section 179 ? Tax Relief From Depreciation Rules

"Depreciation." For business owners, this word is the one most... Read More

E-commerce Taxation

The means and types of businesses have transformed with advent... Read More

Getting A Second Extension to File 2004 Taxes

Millions of people file tax return extensions every year. The... Read More

How to Reduce the Estate Tax Using the A-B Revocable Living Trust

In a past article I relayed the plight of the... Read More

10 Thoughts on Tax Offer in Compromise

Beware of advertisements that claim to settle tax debts for... Read More

Fiscal Deity: Tax Consultant

Strategic planning throughout the year results in a minimal tax... Read More