No Money to Pay Your 941 Employment Taxes? How to Deal

Payroll taxes are a pesky reality of life as a business owner. Not only do you need to report on any taxes withheld from employees’ paychecks, you’re also responsible for getting these taxes to their final destination. Your failure to deposit withheld taxes on time could prompt harsh consequences from the IRS — consequences that threaten the future of your organization. All hope is not lost, however. With the right approach, you can remain within the good graces of the IRS. Keep the following in mind as you deal with payroll tax obligations:

Don’t Ignore Deadlines

Whatever you do, avoid the urge to hide and wait for the storm to pass. Avoidance will not elicit the desired outcome. While the IRS will occasionally overlook late payments, missed payments are another matter altogether. You will quickly begin to see assessed penalties and interest on your tax bill, followed by collection efforts. If you continue to ignore notices from the IRS, you could suffer garnished accounts receivable or bank accounts. Worse, if you are identified as the responsible individual, you could be hit with the Trust Fund Recovery Penalty or even criminal charges.

Set Up an Installment Agreement

If you’ve fallen behind on payroll taxes, your best bet may be a business installment agreement via the IRS. This approach allows you to cover tax debt over the course of several weeks or months. When you apply, you will need to provide verification of your identity as an individual, along with your Employer Identification Number and the date your business was established. An enrolled agent can help you secure a favorable installment plan.

If financial concerns have you struggling to handle tax obligations, you can take solace in knowing that you’re not alone. The compassionate tax experts at the Highland Tax Group are happy to help. Reach out today at 720-398-6088 to learn more.