It’s no secret that entrepreneurship is challenging. If you’re like half of all small business owners, you’ll make the tough decision to close down within five years of launching.
Unfortunately, the difficulties don’t end the moment you decide to shut down your business. A variety of tax liabilities remain on the table, including, most notably, payroll taxes. The sooner these are handled, the better — your failure to fulfill such obligations could prove devastating.
Payroll Taxes: Your Obligations As a Former Business Owner
As you shut down your business, the IRS mandates that you file final employment tax returns and cover related deposits. Additionally, you’ll need to file an annual return reflecting your final year in business. This should include a statement highlighting who handles your payroll records and where such records are kept.
What Happens If You Ignore Payroll Taxes?
Regardless of whether you’re still in business, the penalties for avoiding payroll taxes could prove surprisingly harsh. The IRS may hold you personally liable, even if your previous business fell under the supposed protection of an LLC or corporation. If deemed necessary, the IRS could even go after your assets.
Don’t assume that filing for bankruptcy will get you out of trouble. In most cases, the most realistic solutions involve settlements or payment plans.
Fail to make arrangements quickly enough, and you could suffer the trust fund recovery penalty. This consists of 100 percent of the unpaid taxes. Clearly, a proactive approach is preferable. If you’re struggling to cover your final payroll deposits, don’t hesitate to seek assistance from a trusted tax resolution provider.
Whether you’re a current or former business owner, there’s no need to navigate the complications of payroll taxes alone. The team at the Highland Tax Group can help. Call 720-398-6088 today or contact us online to learn more about our tax resolution services.