{"id":45,"date":"2018-02-20T11:00:08","date_gmt":"2018-02-20T16:00:08","guid":{"rendered":"http:\/\/www.heywardcpa.com\/blog\/?p=45"},"modified":"2023-02-18T23:13:46","modified_gmt":"2023-02-19T04:13:46","slug":"why-you-must-file-and-pay-your-employees-withholdings-on-time","status":"publish","type":"post","link":"https:\/\/www.heywardcpa.com\/blog\/2018\/02\/20\/why-you-must-file-and-pay-your-employees-withholdings-on-time\/","title":{"rendered":"Why You Must File and Pay Your Employees’ Withholdings on Time"},"content":{"rendered":"
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Image credit: stocksnap.io<\/figcaption><\/figure>\n

There is zero wiggle room when it comes to handling the federal income taxes and FICA taxes withheld from employees\u2019 paychecks. The taxes are government property, which employers hold “in trust” and then remit to the IRS on a set schedule. Employers are not permitted to use this “trust fund” money for other purposes.<\/p>\n

Serious Penalty<\/strong><\/p>\n

The penalty for breaking the rules is harsh. Any person involved in collecting, accounting for, or paying the trust fund taxes — a “responsible person” — who willfully<\/em> fails to do so may be liable for a penalty equal to 100% of the unpaid taxes. The penalty is aggressively enforced.<\/p>\n

Responsible Persons<\/strong><\/p>\n

Generally, a responsible person is anyone with the power to see that the taxes are paid. This might include a corporation\u2019s officers, directors, and shareholders; employees; and the partners in a partnership. Under certain circumstances, even family members and professional advisors may be subject to the penalty.<\/p>\n

It\u2019s not uncommon for there to be more than one responsible person. When that\u2019s the case, each<\/em> responsible person could be found liable for the full penalty.<\/p>\n

A Word About Willful <\/strong><\/p>\n

Failure to pay trust fund taxes can be willful without being an intentional attempt to evade paying the taxes. Temporarily “borrowing” from the trust fund to meet bona fide business expenses in a pinch can qualify as being willful.<\/p>\n

For more tips on how to keep business best practices front and center for your company, give us a call today. We can’t wait to hear from you.<\/p>\n","protected":false},"excerpt":{"rendered":"

There is zero wiggle room when it comes to handling the federal income taxes and FICA taxes withheld from employees\u2019 paychecks. The taxes are government property, which employers hold “in trust” and then remit to the IRS on a set schedule. Employers are not permitted to use this “trust fund” money for other purposes. Serious … Read more<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[95],"tags":[],"class_list":["post-45","post","type-post","status-publish","format-standard","hentry","category-tax-business"],"modified_by":"James E. Heyward CPA","_links":{"self":[{"href":"https:\/\/www.heywardcpa.com\/blog\/wp-json\/wp\/v2\/posts\/45","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.heywardcpa.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.heywardcpa.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.heywardcpa.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.heywardcpa.com\/blog\/wp-json\/wp\/v2\/comments?post=45"}],"version-history":[{"count":1,"href":"https:\/\/www.heywardcpa.com\/blog\/wp-json\/wp\/v2\/posts\/45\/revisions"}],"predecessor-version":[{"id":47,"href":"https:\/\/www.heywardcpa.com\/blog\/wp-json\/wp\/v2\/posts\/45\/revisions\/47"}],"wp:attachment":[{"href":"https:\/\/www.heywardcpa.com\/blog\/wp-json\/wp\/v2\/media?parent=45"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.heywardcpa.com\/blog\/wp-json\/wp\/v2\/categories?post=45"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.heywardcpa.com\/blog\/wp-json\/wp\/v2\/tags?post=45"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}