Businesses of all sizes may have issues when it comes to payroll taxes. The Internal Revenue Service (IRS) is generally not forgiving – leaving businesses on edge when tax season comes around. Still, by understanding and preparing for the most common problems with payroll taxes, companies can avoid any issues. Below, the experts at ORT Consulting have listed 3 of the most common problems businesses encounter with payroll taxes.

Late Payments = Late Fees.

The IRS is serious regarding due dates and slapping penalties when payroll tax deposits are late. Instead of charging a set dollar amount, the IRS charges a percentage of the tax owed if your payment is late. Typically, rates start at 0.5% each month your payment is late. However, the fines can stretch up to 25% if your payment is late for several months.

How To Avoid This:

Make your tax deposit payments on time every month. Taxes are withheld from employee paychecks on the 15th of each month (if paying monthly), at which time deposits are typically due. ORT Consultants can assist you in developing a payment schedule for your business for payroll taxes. We can streamline the process for you to prevent future late payment penalties.

Failure to Pay Federal Taxes

Failure to withhold federal income tax, Social Security, and Medicare taxes can result in a hefty fine. The IRS takes this very seriously and can even hand out jail sentences to those who fail to do so.

How To Avoid This:

Keep employee wages and salaries organized and accounted for. Please consult with one of our ORT Consulting professionals for assistance filing your business taxes, no matter how big or small.

Forgetting IRS Form 1099

A lot goes into running a business; sometimes, required paperwork can be difficult to keep up with. According to the IRS, any business that paid a third party for work totaling $600 or more must fill out IRS Form 1099. The penalty for a late or missing 1099 Form can be quite an impact on your business.

How To Avoid This:

Keeping up with transactions and work done within the business is critical. Keep your paperwork organized and avoid waiting until the last minute to organize for tax season. Alternatively, you can allow the professionals at ORT Consulting to take the headache of keeping up with paperwork off your shoulders. Please contact our office at (773) 637-8802 to speak with a representative regarding payroll tax assistance.