As an employer you are required to withhold income tax and self employment taxes and remit these taxes to the Internal Revenue Service via federal tax deposits. The frequency of the deposits is dictated by your tax liability. Typically, a deposit will be required to be made with every payroll, every month on or before the 15th or with the 941 return. A taxpayer can mail in payment or a very easy way to make the payment is through EFTPS.
The failure to timely make your federal tax deposits can lead to multiple issues and problems such as:
1) The failure to deposit penalty
2) The failure to pay tax penalty
3) 941 Employment Tax Debts
4) Personal Assessment of the 941 Trust Fund Portion to Individuals
As indicated above, 941 taxes are considered a trust fund tax, and thus when the tax is not paid, the trust fund portion can be personally assessed to one or multiple individuals involved with the business, and the IRS can collect from both the business and responsible individuals. Publication 15 (also known as Circular E) can also be a useful resource for business owners and tax professionals.
The video below has been prepared by a tax attorney to provide additional information regarding federal tax deposits. You can speak with a Denver tax attorney at The McGuire Law Firm if you have any questions regarding your depositing requirements or other 941 matters. John McGuire has assisted many businesses with 941 tax related issues and debts, and has resolved many issues for individuals related to the trust fund portion. All potential clients receive a free consultation and we would welcome the opportunity to meet with you! Offices in Denver and Golden for your convenience.
