Close this search box.
Blog » Business Tips » Watch Out for Past Due Payroll Taxes

Watch Out for Past Due Payroll Taxes

As a business owner, one of your responsibilities is to make sure that you pay your taxes, including your end of payroll taxes. Not only that, but you also need to make sure that you pass on your employees’ portion of the payroll taxes to the government.

If you aren’t careful, you could end up with past due payroll taxes, and all of the penalties that go with it. Here are some things you should know about paying payroll taxes:

You Shouldn’t Borrow from Payroll Taxes

It can be tempting, especially if you are on a tight budget, to borrow from your payroll tax fund to cover operating expenses and other items. However, it’s important to remember that the money isn’t yours. The money you take from employee paychecks for payroll taxes should be passed on to the government as soon as possible.

Don’t hold back your end, either. Borrowing from payroll taxes is illegal, and you need to make sure that you aren’t involved in that type of activity. Make your payments as quickly as you can to ensure that you are tempted by the money sitting there.

Penalties Add Up to Make Your Debt Bigger

Your tax bill can balloon in size with the help of penalties. When you don’t file your taxes, or if you haven’t paid your payroll taxes, the IRS can add penalties and interest. This increases your tax bill quickly. The main penalties you might see as a result of your payroll situation include:

  1. Failure to fail
  2. Failure to deposit
  3. Failure to pay

You need to make sure you are in compliance with all three of these issues. Once the penalties start piling on, they also start accruing interest, and that can make your debt even bigger. The longer you go without taking care of the tax debt, the worse it will be.

The IRS Can Seize Equipment and Take Other Actions

When your tax debt is on the rise, including when it’s due to payroll taxes, the IRS can do what it takes to collect. This includes seizing equipment and intercepting payments from people who owe you money. If you aren’t careful, you could find yourself struggling to pay the bills as your assets are use to pay off the payroll tax debt you have.

And don’t forget that not paying your taxes, including your payroll taxes, you might be subject to criminal investingation and charges. The IRS has to prove that you are doing this intentionally, and it’s not something that happens a lot with most small business owners, but it’s always a possibility.

If you are having trouble paying your end of the payroll tax, it’s a good idea to get professional representation and then try to work with the IRS as soon as possible. The IRS offers different plans for individuals and for businesses to meet their obligations. However, the bigger your tax bill is, the more difficult it will be to make arrangements with the IRS. As a result, it’s important to carefully consider your options and turn to a professional or an accountant for help if you need it.

Credit Expert
I’m Miranda and I’m a freelance financial journalist and money expert. My specialties are investing, small business/entrepreneurship and personal finance. The journey to business success and financial freedom is best undertaken with fellow travelers.

About Due

Due makes it easier to retire on your terms. We give you a realistic view on exactly where you’re at financially so when you retire you know how much money you’ll get each month. Get started today.


Top Trending Posts

Due Fact-Checking Standards and Processes

To ensure we’re putting out the highest content standards, we sought out the help of certified financial experts and accredited individuals to verify our advice. We also rely on them for the most up to date information and data to make sure our in-depth research has the facts right, for today… Not yesterday. Our financial expert review board allows our readers to not only trust the information they are reading but to act on it as well. Most of our authors are CFP (Certified Financial Planners) or CRPC (Chartered Retirement Planning Counselor) certified and all have college degrees. Learn more about annuities, retirement advice and take the correct steps towards financial freedom and knowing exactly where you stand today. Learn everything about our top-notch financial expert reviews below… Learn More