A major symptom is see when small businesses are in trouble is payroll tax delinquencies. Cash is short, and employers sometimes bear penalties for those extra days of cash flow. Those days are coming to an end.
The federal government is looking for more money. President Obama is asking for a 5.3 percent increase in IRS funding and increasing the number of enforcement IRS agents by 800.
Employers, including officers who have check writing authority, could be civilly and criminally liable. Anyone who is a decision-maker regarding the allocation of funds could be under scrutiny.
To avoid falling into the employment tax trap:
- Hire a payroll service. Payroll services force you to pay your taxes on payday.
- Keep the payroll and general business accounts separate. Comingling these funds clouds what is the government’s money and what belongs to your company.
- Pay attention to payday warning signs. Just covering net payroll checks means it’s time to adjust cash flow management. Business owners can start by understanding that payroll taxes are not the company’s money.
We work with companies whose accounting systems are less than adequate. We can get you on the right track.