What If I Don't Pay My 941 Employee Taxes?
Failure to deposit your employee's federal tax, their social security and Medicare tax, and your matched portion of the social security and Medicare tax can result in high penalties and interest. Say you had a 941 deposit for a given pay period where the federal tax withheld was $100, the social security and Medicare taxes were $200 and your employer portion was $200; bringing the total amount of the deposit due to $500.
The IRS applies high penalties and interest that accrues weekly and monthly and can be as high as 10% for penalties per week and 25% for interest per week. By doing the math, you can pretty much figure out how far in debt your business can get by failing to pay your 941 employee taxes.
Finally, all employers must file a 941 Quarterly Wage Report form showing all wages paid and 941 taxes deposited. If you have paid on time and the correct sum, the amount you will owe quarterly should be zero. For more information on how to correctly withhold and file 941 employee taxes, read the IRS Circular E, Publication 15 or call the Internal Revenue Office or your accountant and ask for help. Remember, if you have to close your business or file bankruptcy, 941 taxes are never forgiven. You will be responsible for the entire amount until paid in full.
When running a business, it is important to pay attention to entrepreneurial, legal, and tax issues, especially when it comes to what type of taxes you have to pay.