An ounce of prevention is worth a pound of cure clearly applies to business tax debt. This problem is highly avoidable, even for businesses facing severe financial hurdles.
Haphazard records cause a world of trouble, especially for small business owners. The IRS recommends retaining payroll tax records for at least four years after fourth-quarter filing. Recommended records include:
- Employer identification number
- Dates of employment
- Amounts and dates for payments
- Reported tips
- Copies of withholding certificates such as Form W-4
- Tax deposit dates and amounts
The Importance of Timeliness
It’s crucial that you abide by all deposit and Form 941 deadlines. With missed deposits, interest begins to accrue almost immediately.
Timeliness is just as important if you make a mistake or miss a deadline. Don’t hold off on filing until the next quarter; complete necessary documents as soon as possible; this will prevent further issues down the road. You’ll find it far easier to secure future extensions if you possess a history of on-time filing.
Submit Form 941-X as soon as you notice errors in Form 941. Don’t wait for the IRS to discover your mistakes. In many cases, early fixes allow you to avoid penalties, especially if you file the Form 843 request for abatement.
Monitor Payroll Companies
A trusted payroll company can help you keep track of deposits and records. Choose carefully and continue to monitor your provider; if they mess up, you’ll still be held accountable.
Resources For Employment Tax Filing
Struggling to file necessary employment tax forms? There’s no need to go it alone. Check out these useful resources:
- IRS: Employment Taxes for Businesses
- IRS: Where to File Your Taxes for Form 941
- IRS: Employment Tax Recordkeeping
- Small Business Administration: 5 Payroll Tax Mistakes to Avoid
- Jeff England: Your Tax Teacher Podcast
- Central Valley Business Journal: Businesses Need to Worry About Employment Taxes
Struggling with an IRS Form 941 issue? Whether you’re late filing or dealing with a payroll tax mishap, the experienced team at Highland Tax Group is here to assist. Call us immediately at 720-398-6088.