IRS 941 or Payroll Taxes
Employers who withhold income taxes, social security tax, or Medicare tax from employee’s paychecks or who must pay the employer’s portion of social security or Medicare tax, use Form 941 to report those taxes.
If you are a business owner with employees and fail to file and pay your IRS payroll taxes, it will not go unnoticed. The IRS requires that you withhold federal income tax, Social Security and Medicare taxes from your employees wages. How much should be withheld depends on the employee’s Form W-4.
These IRS payroll taxes must be paid on a quarterly basis: March, June, September, and December. Under certain circumstances, some small business owners may be eligible to file these taxes on an annual basis. Deposits can be made to the IRS electronically or by taking the deposit and required forms to a Federal Reserve Bank or other authorized financial institution. The IRS determines how often deposits are to be made, and they update these requirements each year, based on the annual payroll.
Didn’t File or Pay 941 Taxes
If you have a balance due or missing filings for 941 Payroll Taxes, the IRS can and will be very aggressive in its collection attempts. Penalties the IRS can assess to a liability can drastically increase the amount owed in a very short period of time. The failure to make timely deposits is a large portion of these penalties. When in doubt, file your taxes even if you cannot afford to pay what is due at that time.
The business owner or the responsible fiduciary may be held personally responsible for the non-payment of withholding taxes, also known as Trust Fund taxes, in the form of a Trust Fund Penalty. If the IRS determines the business cannot pay it’s past due taxes, they will then focus on any individuals who the IRS deems as responsible. Contact a tax professional and learn how to avoid this, and definitely if you are being assessed a Trust Fund Penalty.