Small businesses: Stay clear of a severe payroll tax penalty
Managing payroll is a laborious task for small businesses. But it’s critical to withhold the right amount of taxes from employees and pay them over to the federal government on time. If you don’t, you could be hit with the Trust Fund Recovery Penalty, also known as the 100% penalty. It applies to the Social Security and income taxes required to be withheld by a business from its employees’ wages. It’s called the 100% penalty because people liable or responsible for the taxes can be personally penalized 100% of the taxes due. Absolutely no failure to withhold and no “borrowing” from withheld amounts should ever be allowed in your business. Contact us for more information.