If you own a small business, you may have been put in a position where you don’t have enough money to cover your entire gross payroll. Whether it’s because your largest account didn’t pay on time, there was a downturn in the industry or you simply didn’t foresee this cash problem early enough, it is a situation that there’s no easy answer for.
When you’re faced with this situation, what should you do? Go to your employees and ask them to hold your check? If you want to keep your employees, probably not. Get short term financing? Beg, borrow or steal?
Most of the time there is no good answer. Employees need and deserve to get paid and paid on time. What happens the majority of the time is that the net payroll is met and withholding taxes go unpaid. Obviously, this is costly. The IRS will charge a late payment penalty and interest that exacerbate the problem. When the quarterly 941 tax return becomes due, many people decide against filing it with a balance due for the previous quarter’s liability, generating another penalty for failure to file timely.
All of this snowballs and before you realize it, there is a significant payroll tax problem on your hands. If you are in this situation, it’s time to act now. Contact us today and find a solution that will end this.
To learn more about business payroll tax problems, click here.