Don’t miss any 940 payments – or 941 payments – on your payroll taxes. Find out why!
October 22, 2010
Because the IRS relies on each business to report its 940 payments / 941 payments, it enforces very strict rules and steep fines to make sure that everyone complies by faithfully making their payments and filing their returns on time.
Find out how steep the payroll tax penalties can be!
Your payment is 1 to 5 days late: 2% of the amount due
Your payment is 6 to 15 days late: 5% of the amount due
Your payment is 16 or more days late: 10% of the amount due
If you are notified of your delinquency and you do pay within 10 days: 15% of the amount due
The IRS can, in some instances, impose what is called the Trust Fund Recovery Penalty – 100% of the amount due calculated.
And, contrary to what some folks will tell you, once you have been assessed a penalty, it is very difficult to get the IRS to waive the payroll tax penalties and interest. If you fail to heed the warnings, you may end up wishing you were messing with “Jim,” rather than the IRS, with your payroll taxes.
So, consult with your accountant or work with a payroll company to make sure your payroll taxes are paid on time and your returns are filed promptly each quarter. If cash flow management is a problem, then you should consult a factoring company to help smooth out the bumps in your cash flow.