Friday, August 29, 2008

Business Taxes - Am I Liable?

Business Taxes – Am I Liable?

Are you a business owner? Does the business owe taxes? If so, you may be liable for the taxes and need to speak with a tax professional. There are two types of taxes associated with a business (excluding sales taxes) and they are income and payroll taxes. Most small business owners get into trouble in the area of payroll taxes. It is the responsibility of the business owner to withhold the appropriate amount of payroll taxes and then pay the federal government and the state government (if applicable).

Payroll taxes are due on the 15th of the month immediately following the month for which the taxes were withheld. If the taxes are not paid the IRS will notify the business owner of the amount owed. If not paid within the timeframe requested then the IRS will take actions to collect. If the business is unable to pay the taxes the IRS can force the business to close and then go directly to the business owner to pay the taxes at which point the business owner becomes personally liable for the payroll tax(es).

The good news in this is that often times dealing with the IRS can be somewhat easier as an individual taxpayer than as a business. Payroll taxes rank as one of the top IRS collection priorities. Taking a proactive approach to this problem is always the best option. If you think you have an issue with payroll taxes consult a tax professional today.

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