Did you know that many employers are either failing to file their payroll tax (form 941), failing to file it accurately, or worse yet, failing to pay payroll taxes on time? All of these compliance issues have consequences: CIVIL PENALTIES. Although non-profit organizations (our niche!) are not required to file a income tax return, they are still required to file a 941 for any employee on payroll. And yet, the worse compliance issue among all employers, nonprofit or otherwise, is failing to pay their 941 quarterlies on time.
How Many Employers Fail To Pay On Time?
If you are non-profit organization, or work for one, and have failed to pay your 941, you are not alone. As of 2020, of the over 627 million civil penalties that have been assessed by the IRS against employers, over 360 million of them were penalized for failure to pay. In addition, of all the civil penalties assessed by type of filer, employment tax filers were 2nd (over 10%!) with individuals, estates, and trust income tax filers making up the majority of the penalties assessed (over 83%).This is a problem. View the figures here.
Why Is Failing To Pay Your 941 On Time A Problem?
First off, we can understand the challenge as the form itself has changed dramatically over the last few years. It is not the 2-page form it once was in 2019. It has now evolved to a 6-page form with COVID-19 credit and deferral calculations making filing this form an administrative hassle. There is larger issue at stake than filing this form, an issue that can dramatically impact both the employer and their employee.
What Is The Bigger Issue?
Unpaid tax debt is bigger issue! For individuals or businesses, the IRS can place liens on assets, that is, computers, desks, business vehicles, production equipment, and, up to and including office buildings for unresolved payroll or other tax debt.
Worse yet, employers who have received several unaddressed IRS notices can have their business property seized altogether! Meaning going out of the business for the employer and no job for the employee. A nightmare!
How To Keeping Out Of Payroll Tax Debt?
- File your 941 returns on time (use an e-file provider, like us) or have your payroll processor file it for you
- File quarterly for less than $2,500 in payroll taxes during the lookback period
- Due by the end of the month following the end of the quarter
- File monthly for less than $50,000 in payroll taxes
- Due by 15th of of the following month
- Semi-weekly for more than $50,000 in payroll taxes
- Due by Wednesday/Friday of the following week based on pay dates
- File quarterly for less than $2,500 in payroll taxes during the lookback period
- Pay your return on time
- If the tax due is less than $2,500 you can pay by check, otherwise pay through EFTPS
What If I've Have Already Missed Several Payments?
We can help. We can bring you into full compliance, request penalty abatement, and address this issue with the IRS directly. Getting them off your back and out of your hair, we make sure all your 941s are caught up and we determine the tax resolution solution that would work in your organization's best interests.
We want you to stay operating, keep your equipment available for your employees to use, and keep your products and services available to offer the public.
Reach out to us, we can help.
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