A failure to meet tax deadlines can mean more than a headache, it can mean a hefty financial penalty and possible interest. Depending on the details behind the error, the Internal Revenue Service (IRS) could also attempt to make allegations of criminal wrongdoing. Every business owner is wise to know the basics to avoid making a mistake.
#1: Employment taxes
Businesses with employees must pay employment taxes. These can include Social Security and Medicare. Payments may be withheld from the employee’s paycheck and are remitted to the IRS on a quarterly basis.
#2: Excise taxes
Certain businesses may also need to pay an excise tax. There are rules that guide the imposition of this tax, which applies to businesses that sell certain goods, services, and activities. Common examples include the sale of liquor and tobacco products. These are also generally due on a quarterly basis.
Calculating a business’ tax obligations is complicated. Businesses can utilize tax planning strategies to reduce their tax burden. It is important to keep proper documentation of these steps so that you can defend the claim in the event of an audit.
Those who miss these deadlines may find themselves the recipient of a notification of an audit by the IRS. Know that you do not have to go through the process on your own. You can have legal counsel to guide you through the process. An attorney experienced in this niche area of tax law can advocate for your business’ interests and work toward a more favorable outcome.