Failure To Pay Employment Taxes ? Penalties

As an employer, you must pay employment taxes if you have employees. Fail to pay and the IRS will rain all over your parade.

Penalties

If you have employees, you absolutely must deduct and withhold various taxes from the paychecks of your employees. Since you are deducting money from the employee's paycheck, you are handling their funds. This fact is very important to the IRS and it places great emphasis on any failure to deposit employment taxes.

If you fail to pay employment taxes, you will be subject to a 100 percent penalty. Yes, 100 percent. Known as the "trust fund recovery penalty", the penalty is assessed against the person responsible for paying the taxes, not the entity. The person can be the owner, corporate officer or other "responsible person." In short, a business entity is not going to protect you from the wrath of the IRS.

Late Payments

Cash flow crunches are an inevitable event for practically every business. So, what happens if you make a late payment for employment taxes. Unless you can show a reasonable reason for the delay, the IRS is going to penalize you.

Late payment penalties range in amount depending on the delay. If the delay is less than six days, the penalty is two percent. Delay for six to 15 days and you are looking at five percent. More than 15 days in delay is going to push the penalty to 15 percent. If you delay this long, the IRS will be peppering you with penalty notices telling you where you stand.

In Closing

Whatever you do, make sure you deposit employment taxes with the IRS in a timely fashion. Take a moment to think about the worst thing you have ever heard done by the IRS. If you fail to pay employment taxes, the actions taken by the IRS will be ten times worse and you will be the one telling horror stories.

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:

The Problem with France's Plan to Tax Digital Companies  Harvard Business ReviewFrance recently approved a 3% tax on revenues generated by large digital companies in its territory, a move that is now being investigated as a potentially unfair ...
Before filing your tax returns this year, calculate and pay self-assessed tax  LivemintBefore filing your income tax return (ITR) this year, ensure there is no pending tax payable on your part through self-assessment. For this, you need to take into ...
This is how much income tax you're paying to your state  CNBCHello, New York! The Empire State is home to some of the highest income taxes in the country. It collected $2249 per capita in individual income taxes in 2017, ...
ITR filing: Over 1.46 crore income tax returns filed already; here's how you can choose correct form  Business TodayThe penalty for ITRs furnished on or before December 31 is Rs 5000 but double that amount for later filings; if your taxable income is below Rs 5 lakh, the ...
Opinion | Why 15% should be the target rate for all taxes in the country  LivemintIndia's long-term vision for taxation should be 'one nation, one tax rate' for both income and GST.
People angry over rising inflation, heavy taxes in PoK  India TodayPeople in Pakistan occupied Kashmir (PoK) are facing immense difficulties due to the consistent increase in inflation rates and heavy pay taxes implemented by ...
Why new tax surcharge has stunned foreign portfolio investors  Economic TimesThe business entities known as Association of Persons have been stunned by new surcharge.
TurboTax pushed low-income taxpayers to paid tier to make up for Trump tax law  The VergeTurboTax, facing lower revenues following the passage of President Donald Trump's 2017 tax law, decided to start targeting lower-income individuals with paid ...
Family that refused to pay tax because it was 'against God's will' ordered to pay $2.3m  The GuardianTasmanian judge tells family there is no Bible passage that says “thou shalt not pay tax”
Tax no more |India Today Insight  India TodayThe government's challenge is to pump up falling tax revenues, fulfil its promise of lowering corporate tax rates and spur spending in a slowing down economy.
Higher taxes on the rich, but low returns for the Union government  LivemintThe govt expects the additional revenue from the increased surcharge on individuals at just ₹2724 crore.On Friday, finance minister Nirmala Sitharaman ...
Why high income tax rates are so unjust in India - Govt's justification  Economic TimesIt's true, there are countries where the super rich pay even higher taxes than they do in India.The government used this to justify the higher taxes that those ...
Opinion | How we could improve tax compliance behaviourally  LivemintOne of the fallouts of years of socialist thinking is that becoming rich is considered a sin. This narrative needs to change.
No More Deals: San Francisco Considers Raising Taxes on Tech  WIREDAt a recent postmortem for the so-called Twitter tax break, the divisive San Francisco policy that drew tech companies to a beleaguered stretch of downtown, the ...
NJ Gov. Murphy confident lawsuit against IRS over SALT tax deductions will succeed  CNBCNew Jersey Gov. Phil Murphy is confident that his state's lawsuit against the federal government over charitable donation tax write-offs will succeed, he told ...
Verify pre-filled data carefully before filing tax  LivemintPre-filled information is only available for those filing their tax on ITR-1 or ITR-4 completely online using the income tax department's e-filing website.The form ...
Will Aadhaar interchangeability for ITR make PAN redundant?  LivemintApart from interchangeability with PAN, Aadhaar can also be quoted in other transactions that otherwise require quoting of PAN.In a few years, Aadhaar may ...
More classes may be asked to file income tax returns to check evasion  LivemintThe government may notify some other class of people who would be required to file income tax returns (ITR).The Modi government has been consistently ...
We should celebrate those who pay taxes: View  Economic TimesThe minority that accounts for its income and pays taxes every year is lonely in its faith and sense of duty.
Siblings who claimed paying taxes was 'against God's will' ordered to pay $1.4 million  New York Post Two Australian siblings who refused to pay income taxes for eight years because it went “against God's will” were reportedly ordered to fork over $1.4 million to ...
FM Nirmala Sitharaman shrugs off pleas by FPIs on super-rich tax  LivemintThe super-rich tax is here to stay for a large section of foreign portfolio investors (FPIs), with Union finance minister Nirmala Sitharaman ignoring their pleas ...
Changed jobs? Report all salaries and pay taxes  MoneycontrolTax return filing may be relatively complex in case you have changed your job and have worked with more than one employer during a particular financial year ...
NHAI plans land appreciation taxes to finance projects  Economic TimesNHAI is working on a mechanism to share gains in land value on account of upgradation of highways.
Buyback tax: A loophole fixed or an anomaly made worse?  LivemintIn the past three fiscals, Indian firms bought back shares at an average rate of ₹47800 crore.
Paying rent or letting out your place? Know the tax treatment on house property  MoneycontrolThe annual value of a house property is the amount of rent which it is reasonably expected to earn.
Govt’s new buyback tax set to hit MF investors, shareholders alike  LivemintThe new buyback tax coupled with dividend tax may lower the return from various equity investments.Investors should keep a close eye on how companies and ...
Beware. Other Nations Will Follow France With Their Own Digital Tax.  The New York TimesLast Thursday, the French Senate passed a digital services tax, which would impose an entirely new tax on large multinationals that provide digital services to ...
Morgan Stanley's rich clients withdrew a surprising amount from accounts to pay their taxes  CNBCWealthy clients liquidate some investments every year to cover their tax bill, so presumably this was higher than what Morgan Stanley has seen previously.
France tech tax: What's being done to make internet giants pay more?  BBC NewsFrance is to become the first country in Europe to introduce a tax on tech giants like Facebook, Amazon and Google. The move has upset the US. So how does it ...
Explainer: Will taxing the super rich affect foreign investment inflows?  India TodayIndustry experts say that new tax regime for the rich could make India uncompetitive and expensive for foreign investors.
The New Biden Tax  The Wall Street JournalFor a candidate who was supposed to be the voice of moderation in the race for the Democratic presidential nomination, Joe Biden spends a lot of time ...
3 tax-planning lessons from Joe Biden's tax returns  CNBCFormer Vice President Joe Biden takes the stage for the second night of the first Democratic presidential debate on June 27, 2019 in Miami, Florida.
Foreign funds to feel the pinch of increased tax on mega rich  Economic TimesMUMBAI: Friday's proposal to raise the tax burden on the mega-rich could also affect about 2,000 foreign funds that are legally equivalent to associations of ...
7 indirect taxation-related laws being amended: Nirmala Sitharaman  Business TodayThe GST alone has five different amendments that would also make compliance easier for the MSME (Micro, Small and Medium Enterprises) sector, she added.
Govt widens scope of direct tax code to make compliance easier for taxpayers  LivemintNEW DELHI: The government on Wednesday widened the scope of a new direct tax code that is on the drawing board to make compliance easier for taxpayers, ...
Budget 2019: Is it feasible to reintroduce inheritance tax in India?  India TodayNoted economists feel that it would be a good idea to reintroduce such a measure in the wake of lower tax collections and need for higher spending in the social ...
LTCG makes filing Income Tax returns tough  Times of IndiaIndia Business News: A recent update in the software utility that enables taxpayers to file their returns online has created hurdles for taxpayers who have earned ...
Amazon paid zero tax for the second year in a row - and it is not illegal  YourStoryIn 2017, Amazon paid zero tax. In 2018, the tech giant paid even less than zero despite making a profit of $11.2 billion, but it is not illegal.
Foreign investors' lobby group asks India to reconsider high taxes  MoneycontrolForeign investors are urging India to reconsider its decision to increase taxes on certain groups of wealthy portfolio investors, arguing the move will hit the ...
Nation's First Carbon Tax Could Be Enacted In Massachusetts  ForbesAs Democrats talk about climate change on the 2020 campaign trail, state lawmakers in Massachusetts are poised to pass the nation's first carbon tax. A new ...
Corporate Tax Rates: How Low Can You Go  International Monetary FundBy IMFBlog. In life, two things are certain: death and taxes, the saying goes. Unless you are a large multinational corporation, in which case, maybe not. Over the ...
Things You Should Know Before Filing Your Income Tax Returns (ITR)  NDTV NewsITR filing: Non-filing of return of income may result in penalty and prosecution, according to the Income Tax department.
Scottish income tax £941m short of forecast  BBC NewsThe amount of income tax revenue raised by the Scottish government in 2017/18 went up by 1.8% but was still £941m short of original forecasts. The HMRC ...
America needs to see Amazon’s tax returns  The VergeTax law keeps us from knowing what Amazon's tax bill really is — even as politicians like Joe Biden, Elizabeth Warren and even Donald Trump call out the ...
Progressive taxation will help bring down income inequality  LivemintThe govt's focus on rationalizing corporate tax rate is the need of the hour for Indian economy.In a dynamic economy, some sectors may need to be incentivised.
Luxury realty braces for impact from higher taxes on ultra-rich  LivemintDevelopers are concerned that the tax rate increase may lead to buyers holding back on buying luxury homes.The cocktail of tax increases, glut in supply and ...
One-Time Amnesty Scheme in Making for Old Income Tax Cases Worth at Least Rs 8 Lakh Crore  News18A one-time amnesty grant for legacy income-tax disputes worth at least Rs 8 lakh crore may be in the works, according to sources. They speculate that a ...
Tax dept seize ₹400 crore Noida plot belonging to Mayawati's brother  LivemintThe Income Tax Department said on Thursday it has attached a benami plot in Noida worth ₹400 crore belonging to BSP chief Mayawati's brother Anand Kumar ...
Fewer taxes, more to spend, say millennials  LivemintMost 23-38-year-olds save little after paying rent, taxes and EMIs and spending on eating out, shopping.India's 440 million millennials saw little relief as prices of ...
Back-to-school sales tax holidays: These 16 states are giving families a tax break  USA TODAYSixteen states have sales tax holidays with Alabama, Mississippi and Tennessee having tax-free days in July. Thirteen other states have their holidays in August.
What are CPSE ETFs? You can soon save taxes by investing in them  LivemintMumbai: You can soon save taxes by investing in Central Public Sector Enterprises (CPSE) exchange traded funds (ETF) as the government is set to introduce ...
India's hedge funds threatened by higher taxes  Economic TimesDomestic hedge funds have taken seven years to reach $6 billion in investment commitments.
New income tax rules with tougher penalty comes into effect: 10 points  LivemintNEW DELHI: Under the revised guidelines of the Income Tax department, those indulging in serious offences under black money and benami laws will not be ...
As Nations Look to Tax Tech Firms, U.S. Scrambles to Broker a Deal  The New York TimesThe proposed levies on firms like Facebook and Google are pitting traditional allies against one another and threatening to set off a cascade of tax increases ...
High indirect taxes are hurting exports, Make in India initiative: Experts  Business StandardHigher tariffs and taxes seem to be hurting India's drive to raise the share of exports in gross domestic product (GDP) and push up economic growth. The recent ...
Tax fraud of about ₹38,000 crore detected last year  LivemintNEW DELHI: Tax officials detected ₹37,946 crore worth of tax fraud in 2018-19 and ₹6,520 crore in the April-June period of the current financial year after the ...
Philly judge orders city and schools to repay nearly $50 million in tax revenue to commercial property owners  The Philadelphia InquirerRuling in one of the largest assessment challenges in Philadelphia's history, a judge on Thursday ordered the city and School District to repay commercial ...
Pakistani businesses on strike over new IMF backed taxes  Economic TimesHundreds of thousands of Pakistani businesses are on strike nationwide to protest a new sales tax, which opposition political parties say is being imposed as ...
What the IRS doesn’t tell you about self-employment taxes  MarketWatchMany taxpayers get confused about whether they owe the 15.3% self-employment tax.
Trump’s Tax Law Threatened TurboTax’s Profits. So the Company Started Charging the Disabled, the Unemployed and Students.  ProPublicaThe move by TurboTax maker Intuit to charge more lower-income customers has helped boost revenue.
What your summer home renovations mean for your taxes  AOLIn general, you cannot deduct renovations for the home you live, but there are a few exceptions.
Tinkering with taxes for foreign and domestic investors negative for market: Samir Arora  Economic TimesI do not think this will revive the market in the short term, says Helios Capital founder.
Have NDA’s tax reforms been counterproductive?  MoneycontrolWith tax revenue collections falling short of budget estimates, there is a need for the govt to reconsider its ambitious targets and reform the tax system.
Budget 2019 analysis: What income tax changes mean for you  Economic TimesHere is a look at the tax proposals announced in both the budgets and their tax impact on your pocket.
9 Airbnb Rental Tax Deductions You Can Take for Your Vacation Properties  EntrepreneurWith summer vacations at a peak, it's a great time to review the top nine tax deductions you can ake for your short-term rental properties through Airbnb, VRBO, ...
Keep your date with filing income tax returns  MoneycontrolWith the Income-tax Return (ITR) filing deadline fast approaching on July 31, 2019 [for individuals not subject to tax audit provisions under the Income-tax Act, ...
View: If it moves, tax it. That's desperate, India  Economic TimesBy Andy Mukherjee Desperation is creeping into India's economic policy-making. Having lost the fiscal plot, bureaucrats are trying to marshal resources by ...
Is it viable to reintroduce estate tax in the upcoming budget?  LivemintAhead of the Budget 2019, there is speculation that the govt may reintroduce estate taxes in order to enhance tax revenue.Ashwini Kumar Sharma asked 4 ...
Tax On Super-Rich Decoded: Here's Your Complete Guide To Understanding New Rules  NDTV NewsIncome tax slab: "In view of rising income levels, those in the highest income brackets, need to contribute more to the nation's development," Finance Minister ...
Budget 2019 | Wealth tax – The idea is to play fair, but is the time ripe?  Moneycontrol.comChances are wealth tax might make a comeback. Even so, the government would do well to put safeguards in place to ensure the common man is not put at a ...
Back-to-school sales tax holidays bringing savings to 16 states  Fox BusinessRetailers are gearing up for back-to-school shopping, and parents in students in many states will be able to pick up their supplies without having to pay any state ...
Can countries lower taxes and raise revenues?  The EconomistRARELY has a dinner-table scribbling created such a legacy. In 1974 Arthur Laffer, an economist, sketched a simple diagram on the back of a napkin to illustrate ...
Income tax return filing: Here's your step by step guide  Economic TimesJuly 31 is the last date to file your income tax return (ITR) for FY 2018-19. By filing your ITR on time, along with certain benefits such as carry forward of losses, ...
How a Tax Loophole Is Helping Silicon Valley Workers Save Millions  The New York TimesA little-known tax break allows some start-up employees who own company stock to avoid paying taxes on up to $10 million when they sell their shares.
Facebook answers how Libra taxes & anti-fraud will work  TechCrunchFacebook provided TechCrunch with new information on how its cryptocurrency will stay legal amidst allegations from President Trump that Libra could facilitate ...
Banks approach Delhi HC against ₹38,000 crore service tax demand  LivemintNew Delhi: Thirteen banks have moved Delhi High court against a government demand for *service* tax to the tune of of ₹38,000 crore. Their claim is that the ...
Budget 2019: Income tax collection target too steep, say experts  Business StandardThe income tax collection target was still far from realistic despite the number being revised downwards in the full Budget from the interim Budget projection, ...
Taxing times ahead for rich, boost for low-cost housing  LivemintSurcharge hiked for those earning above ₹2 crore; higher deduction on home loan interest for low-cost housing.Extra deduction for interest paid on loans taken ...
Maximise revenue, minimise tax  The Indian ExpressIndia has just one policy option to advance private investment and become a $5 trillion economy — reduce corporate tax rate for all firms to 22 per cent, reduce ...
Inheritance tax: it’s really not so taxing  Financial TimesI've never understood the deep unpopularity of inheritance tax. Someone else pays it, and when they do, you are dead. Yet it remains one of the most hated and ...
22 States Considered Eliminating the ‘Tampon Tax’ This Year. Here’s What Happened.  The New York TimesMenstrual products are subject to sales taxes in 35 states, and lawmakers' efforts to exempt them have foundered. Now supporters of 'menstrual equity' are ...
Local option sales taxes and/or income taxes: NOT a solution  The CT MirrorA recent article in the Hartford Business Journal, published as part of the “The Cities Project,” a collaboration among the HBJ, the CT Mirror, Connecticut Public ...
Tax foreign tech giants operating in India, say RSS ideologues, Gandhian  Business StandardThree Rashtriya Swayamsevak Sangh (RSS) ideologues, including K N Govindacharya, and a Gandhian have written to Finance Minister Nirmala Sitharaman to ...
San Francisco pulls the controversial “IPO tax” because it wasn’t simply an IPO tax  Vox.comSan Francisco has pulled a controversial measure to impose a new tax on startups filing to go public, partly because the first draft of the proposal swept too much ...
Share buyback tax brings in new challenges for listed companies  The Financial ExpressThe major advantage of the buyback is that no tax equivalent to dividend distribution tax is applicable to companies.
Foreign portfolio investors bear the brunt of taxation flip-flops  LivemintA senior official at the finance ministry remarked a day after the budget that the most complex part of the Finance Bill proposals are contained in Part I of the first ...
Boris Johnson says tax cuts bring in revenue. But we now know that’s a myth  The GuardianHe cites the Laffer curve theory – yet it's no more credible than a magic money tree, says Guardian columnist Polly Toynbee.
The Coalition's tax plan will make for a very different Australia – one that's much less equal  The GuardianThe government's tax cuts are set to favour the wealthy and massively reduce revenue because they want them to.
Tax department tightens the noose on offenders  LivemintCBDT's stiffer tax provision will ensure serious offenders can't escape prosecution.The guidelines restrict the number of times a person can file a compounding ...
Soon, Tax Dept to send SMS on 18 types of high-value transactions  BusinessLineSoon, you will receive an SMS from the Income Tax Department if you quote your Permanent Account Number (PAN) for 18 types of financial transaction where it ...
Income tax burden weighs on the salaried class even as costs climb  LivemintNEW DELHI: I generally don't talk about salary, but any salaried employee earning ₹1 lakh a month in a metro city is living a hand-to-mouth situation, says ...
Budget impact: Tax on liquor licence fee scrapped retrospectively  Business StandardRead more about Controversial *service* tax on liquor licence fee abolished retrospectively on Business Standard. Many entities were served notices after the ...
Income tax benefits on NPS explained in 5 points  LivemintThe government has made National Pension System or NPS more attractive by announcing new income tax benefits in Budget 2019 for investors in the pension ...
Budget 2019: Sitharaman urged to bring cigarette taxation to pre-GST level  Business StandardThe Federation of All India Farmer Associations (FAIFA) has urged Finance Minister Nirmala Sitharaman to correct an error in cigarette taxation under the new ...
Budget unlikely to up Rs 2.5 lakh income tax exemption limit  India TodayThe current basic income tax exemption limit of Rs 2.5 lakh is unlikely to be raised in the forthcoming full Budget 2019-20, according to informed sources, as the ...
Modi govt’s bid to tax global tech giants may come unstuck  The Financial ExpressModi government faces several hurdles in taxing international tech firms such as Google, Facebook, Twitter, and others.
Refundable tax credits would help alleviate poverty  The Conversation - CanadaWe have entered a new election cycle, and it appears that a discussion about tax policy will consist primarily of bickering and court challenges around the ...
Higher I-T cess leaves India Inc a worried lot  Economic TimesMUMBAI: The increase in effective tax rate to 43% for those earning Rs 5 crore and more has spread disquiet in India Inc's Csuite, raising the possibility of salary ...
Canadian Town Says Yes to Accepting Bitcoin for Property Taxes  CointelegraphCanadian crypto solutions provider Coinberry has struck its second municipal partnership to provide bitcoin payments processing for property taxes.
Shipping industry needs more to maximise the opportunities created by GST  Economic TimesIn a high-volume, low margin business like shipping, even a 5 percent cost disadvantage can dent the competiveness of domestic shipping businesses ...

Estate Taxes - It Pays to Plan Ahead

Estate taxes. It's not enough to simply know they exist,... Read More

Some Folks Pay A Lot Less Tax Than Others On Very Same Income?Did You Pay Too Much Tax In 2004?

Someone once remarked, "Next to being shot at and missed,... Read More

Slash Tax when Buying a Business

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

Your IRS Tax Appeal Rights

Are you in the middle of a disagreement with the... Read More

Keeping Your Own Money ? NOT Handing It Over To The Taxman

Most people trying to make a crust online (or offline... Read More

Back To School ? Educators Deduct School Expenses

As teachers and students head back to school following a... Read More

Euro Tax Haven Threat

Media reporting of a new EU savings tax directive has... Read More

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

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

Tax Trap #3 -- IRS Penalties, Interest and Love Letters

As a small business owner or self-employed person, one of... Read More

Tax Tips for Home-Based Business Owners

As tax time approaches, many home-based business owners begin completing... Read More

Requirements To Produce Tax Information (Whats Up With That?)

"What we've got here is a failure to communicate." ... 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

Car Donation: An Easy Way to Support Your Favorite Charity and Get a Tax Deduction

Most people look forward to getting their tax return, but... Read More

IRS Obtains More Than 100 Injunctions Against Tax Scheme Promoters

The IRS has obtained civil injunctions against more than 100... Read More

How to Cut Duty Cost and Increase Profit as an Importer

Import duties continue to be significant elements in the cost... Read More

Deducting Points On Home Refinances

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

Small Business Tax Issues for Self-Employed Individuals

The United States is a nation of entrepreneurs. There are... Read More

How To Claim CHILD TAX CREDIT The Right Way And Add An Extra $2,000 To Your Refund

The U.S. Department of Agriculture estimates that it costs nearly... Read More

Save Money on Taxes - Is the Only Way to Get Your Tax Savings is to Sleep With an IRS Agent?

Tilting the Tax Laws in Your Favor.In order to accelerate... Read More

Tax Trap #4 -- The Quagmire of Depreciation

If you are a Small Business Owner or Self-Employed Person,... Read More

Tax Records - What You Should Keep And For How Long

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

IRS Certifies 2006 Toyota Hybrid for Clean Fuel Deduction

The Internal Revenue Service has certified the 2006 Toyota Highlander... Read More

Small Business Tax Credit - Americans with Disabilities Act

Many small businesses complain when confronted with the expense of... Read More

Truly Bizarre Taxes: The Tax on Illegal Drugs

One can never underestimate the enthusiasm that politicians have for... Read More

Are You An Innocent Victim of These Popular Myths?

Misconceptions, misinterpretations and just plain "untruths" are floating about income... Read More