IRS has a great Small Business web page at IRS Business. Check out starting, operating or closing a business at Start/Close Business. Also, check the latest business news that gives small business owners information about the latest mileage rates, worker classification (employee vs. independent contractor) and other announcements See Business News. Get the IRS information on business expenses at Business Expenses.
But as always, remember this is IRS general information. For a more in-depth research and analysis check with your tax attorney or accountant.
Most businesses withhold payroll taxes from employees’ salary checks. Taxes withheld are income, social security and medicare payments. Other withholding items are for State taxes, retirement funds and unemployment funds.
Right now in the hard economic times, business owners may be tempted to use the money they deduct from their employee’s wages for other expenses. The only problems is that the deductions are not the employer’s funds. The funds should be deposited into special accounts for payment to the proper taxing authorities.
If the employer does not make timely deposits, there will be penalties to pay. In addition, if the business goes down, the owner or “responsible person” in the business may assessed the missed deposits under IRC section 6672–the 100% penalty provision. The “responsible person,” usually the business owner will personally owe the money not properly withheld and paid over to the IRS.
If you, as a business owner, are subject to the 100% penalty assessment, contact your tax attorney right away.
See the IRS publication Click Here