Payroll Tax Liabilities
Payroll taxes are taxes paid on the wages and salaries of employees. There are two components of the payroll tax: First, the Federal Insurance Contributions Act (“FICA”) and Second, the Medicare Federal Insurance Contributions Act (“MEDFICA”). The FICA portion consists of a 12.4% tax to fund Social Security and the MEDFICA portion consists of a 2.9% tax to fund Medicare, for a combined rate of 15.3%. One-half of payroll taxes (7.65%) are paid and remitted by the employer, while the other one-half (7.65%) is taken out of workers’ paychecks and remitted to the IRS by the employer. Certain limits apply when it comes to calculating payroll taxes and the taxes are remitted in accordance with IRS requirements.
Payroll tax liability refers to the employment taxes paid and remitted by the employer (the Employer Portion) as well as the funds withheld from workers’ paychecks and remitted on behalf of the employee (the Trust Fund Portion). Often small businesses fall behind on their payroll tax liabilities due to cash flow issues or even simple oversight and they fail to remit the taxes to the IRS. The delinquency is often left undiscovered until the amount owed, including penalties and interest, makes it hard to catch up. If your business falls behind on their payroll tax liabilities or if you receive an IRS notice regarding payroll tax liabilities or other assessments, contact a dually qualified Attorney-CPA at Faizan Law Firm, PC to guide you towards a path of compliance while protecting your business interests. We will negotiate with the IRS on your behalf so you don’t have to and work with you to create a plan to come back into full compliance with payroll tax reporting and payment requirements.
When you or your business demands the dual need for an accountant and an attorney, you shouldn’t have to pay for two different, high-priced professionals. The Attorney-CPA’s at Faizan Law Firm, PC combine the knowledge and experience needed to address the critical issues you face from both legal and financial perspectives simultaneously. Contact us today to experience the power of the dual view.