Sometimes a business will fall behind on paying their payroll taxes to the IRS, the State Department of Revenue or both. This can happen due to software issues (i.e. believing things are being filed when they are not) or some other reason. However, a more common reason is when business owners experience tight cash flow periods and decide to stop paying their payroll taxes.
If you are reading this post and find yourself in the position of owing back payroll taxes, we encourage you to heed this advice:
Read this post in it’s entirety, and IMMEDIATELY do something productive to deal with your matter. Don’t schedule time to work on it later; do it NOW. Our point is that in order to successfully solve your problem, you MUST confront it. So, make a phone call to the state, put funds aside for a payment toward your unpaid balance, complete one of the missing returns, and put it in an envelope to mail with a stamp on it, etc. Just DO something, right now.
Consequences when you don’t file or pay your payroll taxes
Here are some things you can expect to happen when you don’t file or pay:
- Penalties – If the payroll tax return is filed late, the IRS will fine you a percentage of the balance of the return once it is eventually filed. Once the return(s) is filed, if you haven’t paid the associated taxes, the IRS will impose a penalty for not paying within the time frame listed on the notices they sent you. This post on ho