How to Avoid Penalties with the IRS


Many things can go wrong with running a business, but the one thing that a business owner wants to avoid is receiving a monetary penalty from the IRS. Since tax season is coming up, it is important to consider payroll, taxes, and IRS penalties if you are a business owner. If you want to avoid penalties from the IRS, the best thing you can do is to hand over your payroll and tax responsibilities to a local payroll company. However, if you have yet to speak to a third-party company or aren't sure if you want to, here are a few tips that will ensure you and your business can make it through the tax season with no surprises.

Maintain Solid Records

It is common for businesses to incur IRS fines due to failing to report all of their earnings or failing to be able to prove all of the deductions that they claim. In some cases, this isn't intentional; instead, it is simply due to a lack of adequate organization. However, for the IRS, it doesn't matter if the deception was intentional or not—you will be fined. Therefore, it is important to ensure you are organized by maintaining adequate records of all of your earnings and deductions.

Keep Payroll Taxes Separate

Some smaller companies will combine their primary accounts and their payroll taxes. However, it is illegal to use any money that has been collected for payroll taxes for anything but that. To ensure that you don't make a mistake here, make sure that you have a separate account for money that should be used for payroll taxes.

Don't Be Late

While this may seem a bit obvious, it is not uncommon for businesses to receive fines from the IRS each year because they failed to submit their taxes on time. If you owe taxes, you are likely to be held accountable by the IRS as an individual. If you wait too long, you may wind up being charged with the federal offense of failing to pay your taxes. Therefore, it is best to simply file on time each year to avoid the stress of the potential consequences of not doing so.

When it comes to payroll and taxes, it is best to be safe than sorry in order to protect your business. You can consult with a payroll consulting company in your area with any questions or concerns that you may have.

About Me

When All Goes to Plan

When was the last time you sat down and made some concrete plans for your financial future? As in most avenues of life, your finances tend to go better when you approach them in a structured way. You need to set a monthly budget and stick to it, start paying off debt, save for retirement, and make wise purchasing decisions. This sounds easier than it is, which is why hiring a financial planning professional comes in handy. On this website, you will learn more about financial planning, when it is a good idea to call in the pros, and the benefits of taking finance seriously.

Search

Latest Posts

30 July 2020
Winning a large sum of money, whether through the lottery or another venue, you're sure to be excited. This amount of money can be life-changing — but

5 June 2020
If you have reached the big 3-0 and you are starting to think about your financial future, you are not alone. Many people in their 30's start to take

8 April 2020
When you are trying to handle your finances and investing to the fullest, you will always need to work with a broker-dealer that can assist you. By re