Many companies find themselves in trouble with the State or Federal governments because of Employer Taxes. Employer taxes are the monies a company withholds from its employees coupled with the employer’s share of Social Security and Medicare Taxes. So how does a company get into trouble? Sometimes, an employer correctly withholds the monies but doesn’t send it to the appropriate state or federal agency until either the end of a month or quarter, whichever applies. By that time the amount is so large the company can’t pay it. So, the company puts off making the payment all the while incurring interest and penalties. Fiscal Training Solutions knows of one company (Not our client!) that put off paying employer taxes for so long that they were forced to take a second mortgage on their home to pay the back taxes.
The government frowns on delinquent employer taxes, and they should. The money really belongs to a company’s employees.
There are options to avoid this problem. One option is each payday transfer the employees’ withholding and the employers’ share to another checking account so the money will be there when needed. Another option is to use an outside payroll service. Such a service will deduct the tax amounts from you weekly so you never run up a large dollar amount. Fiscal Training Solutions offers a payroll service that not only helps with cash management for tax purposes but also directly imports the payroll information into QuickBooks®. This convenient service saves time and the potential embarrassment of a call from the IRS or your state’s DOR.