Not Paying Payroll Taxes: Why It’s so Hard to Get Away With

It is a bad idea for employers to even think about not paying their payroll taxes. Avoiding payroll taxes is extremely difficult to get away with thanks to how the way the system is set up. There are just too many tools at the government’s disposal to uncover tax cheats. Rest assured those tools are used vigorously.

A case in point is a Landon, North Dakota business owner who recently pleaded guilty to one count of failing to pay payroll taxes. He had originally been charged with nine counts. By pleading guilty to a single count, he avoided a potential five-year prison term and a $250,000 fine.

It is clear from this man’s story that purposely failing to pay payroll taxes is a recipe for legal disaster. But even ignorance can land an employer in trouble. Courts do not look favourably on employers who withhold payroll taxes from worker paychecks and then fail to submit them to the IRS.

What Must Be Paid

BenefitMall, a payroll and benefits administration provider out of Dallas, explains that the three most common payroll taxes are Social Security, Medicare, and FUTA. Social Security and Medicare taxes are combined under the FICA designation. FUTA is the federal government’s version of the unemployment tax.

Both employers and employees split FICA and down the middle. For example, the Social Security tax rate is 12.4%. Employers and employees both pay 6.2%. FUTA is levied against employers only; there is no employee contribution to FUTA.

Income tax also has to be considered. Although it is not technically a payroll tax by reason of employers having no contribution obligation, they must still withhold income tax and pay it to the IRS. The combination of all of these taxes leaves employers with a minimum of four tax obligations. Depending on where they do business, they might have state tax obligations as well.

What Happened in North Dakota

The previously mentioned case from North Dakota is pretty typical for these sorts of cases. Apparently, the business owner ran into some financial trouble that threatened his business. Rather than close, he decided to use withheld monies that should have gone to tax payments to cover other expenses. Those other expenses eventually included personal expenses. For instance, the business owner used some of the money to cover mortgage payments for a time.

He was charged with 10 counts to cover tax reporting periods between 2010 and 2015. It appears as though he got things back in order in 2016. Still, how was his activity uncovered? Through conflicting records.

Different Numbers

The IRS figured out what was going on when they discovered that employee tax return records did not match tax reports filed by the employer. Such discrepancies are fairly easy to identify when people are paying attention. For example, consider the standard W-2 form.

You use the W-2 to file your income tax return every spring. The W-2 shows how much money was withheld from your paycheck during the previous year for the purposes of paying payroll taxes. Your employer files a W-3 that essentially shows the same information. In the North Dakota case, the employer was reporting different numbers on W-3 and W-2 forms. It was only a matter of time before he was discovered.

The court was fairly lenient with this business owner because of his reputation and track record within the community. However, such leniency is not the norm. Suffice it to say that it is never a wise idea to attempt to get around payroll taxes. The government will find out sooner or later.


Advantages of Hiring a Tax Service

Filing your taxes on time is very important. If you are a business owner in Thailand, it’s incredibly important that you file your taxes regularly. If you are caught and charged with tax evasion by the authorities, you might have to pay a hefty fine. However, many business owners look for ways that they can save money on tax payables. In this incredibly dynamic environment, paying taxes is key. Tax compliance and planning are both key areas that businesses need to look at. You might not realize just how much extra you might be paying extra in taxes, but this can be avoided.

Tax Service

Businesses need to understand that there is a big difference between tax evasion and avoidance. Evasion is a crime, while avoidance is allowed by the state. More importantly, by restructuring your business according to specific needs, you can help it grow as well. Businesses can easily take advantage of the tax incentives provided by the government and grow their companies. However, to do so, the first thing that your company will have to do is to hire a tax service in Thailand. Here are a few key advantages that you get for hiring a tax service.

Strategic Planning

The main reason that you should hire a tax service is that they will help you with strategically planning your business interests. This involves due diligence, reviewing any offshore and onshore structures and businesses that you have registered, and analyzing any double taxation agreements that the government might have with the authorities. This can help minimize your liabilities and payments on cross-border transactions. You might be surprised at just how big of a difference a thorough review can make of your business interests.

Investigations and Refunds

Many businesses find it difficult to manage tax refunds and investigations. It’s a confusing and costly process that can take a great deal of time. If you hire a tax service, they are going to support you by liaising with the Thai Revenue Department on your behalf, thus giving you the confidence to focus on your core business while the authorities carry out their investigation.

Transfer Pricing

One of the biggest issues facing local businesses is transfer pricing. It’s the price at which goods are sold by associated enterprises, and it’s been commonly acknowledged as the most important issue that faces multinational businesses. But, if you hire a tax service to guide you, they are going to make it easy for you to handle any tax issues that might arise relating to transfer pricing.

Tax Compliance

Your company needs to have comprehensive records for all issues related to tax payments, including documents that show the revenues generated, the salaries disbursed, and other relevant documents, such as withholding tax returns. You need to make sure that your corporate income tax returns are filed on time. These are just a few of the major advantages that you get for hiring a tax service for your business needs.


Get Professional Help with Your Taxes

No matter how prepared you are for your taxes each year, it’s never a bad idea to get professional help to ensure that you pay everything that you owe and that you do not have any other deductions that you could be taking. When you work with a professional tax service company, you can rely on the fact that they will help to ensure that you keep as much money in your pocket as possible.

3d people – man, people push up word “tax”

Why Get Professional Help

There are a number of reasons why it’s smart to get professional help with your taxes. When you work with a professional on expert self assessment tax inquiry in London, you can rest easy knowing that they will make sure that your taxes are completed correctly the first time. No matter what kind of job you have or your level of income, getting professional help will ensure that you don’t have any problem with your taxes.

Other Ways Accountants Can Help You

There are other ways that a great accountant can help you, besides just offering support with expert self assessment tax inquiries. These professionals can also assist with:

  • Corporate tax returns
  • Personal capital gains tax
  • Business capital gains tax
  • Advice for inheritance tax

Finding an expert accountant is the best way to make sure that you are protected and paying your taxes correctly. If you have problems finding help, researching the reputation of available accountants in your area will help you narrow down your selection so you can find the best person to help you with your needs.

Business Taxes

Advantages of hiring a Business Tax Accountant

Preparing your taxes through a professional will not be economical but its advantages will surely be more than the expense incurred. Improvise your peace of mind in this tax season and even the size of your tax refund by availing the services of a business tax accountant.

With the range of tax preparation software programs available in the market, many business owners are now preparing and filing their own tax returns as a way of saving money. However, there is still something to be told for handling your tax documents to a professional, particularly if you have difficult returns. Availing the services of a tax accountant for your business requirements can make sure that you complete your tax season without worries.

Updated Knowledge

A qualified professional business tax account possesses a certification and will not only have in-depth knowledge about business tax laws and needs, but also the knowledge about your specific state tax laws. As an individual business owner, you may have a broad view of your tax duties, but you may not be familiar about particular tactics. Additionally, tax laws might alter with every year that passes and which implies that a procedure which worked for you last tax season may no longer be appropriate for this one. Majority of business tax accountants attend continual education courses to remain updated about any alterations in tax policy which might affect their clients, and thus they can save you from penalties and fines and even enhance your potential refunds.

Competent preparation

It may take you a considerable amount of time to analyze your particular tax condition, specifically if your business has multiple sources of income and more number of accounts, rental properties, income in more than one state, or other such indirect returns. A business tax accountant files returns for several clients in a day and thus will be able to quickly understand your finances. Hiring someone to work out your business taxes saves you plenty of time, and for your business, time is money.

Improvising Deduction

A business tax accountant can ask you specific questions that indicate deductions you might have missed. It also holds true for tax credits.

Avail the services of only the best accountant. JWA Business & Wealth Accountants in Gold Coast assists you in reorganizing the finances of your business and they will be a valuable asset for your firm in the long run. All aspects of your business finance no matter how great or small require a business accountant. If you are a new business owner, a JWA accountant can provide you useful advice on strategic planning and the financial structure that will guide all your business operations.

JWA can help your business remain at the top. It has professional business Tax Accountants which are experienced in tax matters and in addition to providing advice on tax-related decisions, can arrange all of the taxes for you. You do not have to worry about filling the forms properly or missing out on tax privileges you were not aware of.