Do you have unfilled payroll taxes and wondering where to go from here? Learn what next steps to take when you have unfiled payroll taxes.

Paying taxes is one of the many inevitable things in life. When you own a business, you’ll learn various taxes you’ll have to pay, such as payroll taxes. Payroll taxes are a type of tax split between employers and employees. These taxes cover essential services, such as social security and Medicare.

As with all unfiled taxes, not paying your payroll taxes comes with serious penalties. But with the help of the right tax firm, you can file your payroll taxes and get caught back up. Here’s what to do with unfiled payroll taxes and why you should seek help from a tax settlement company.

Payroll Responsibilities

Before we cover what to do about unfiled payroll taxes, businesses must know why payroll taxes are so integral.

While payroll taxes commonly include government programs such as social security and Medicare, these taxes may look different for various businesses. That’s because payroll taxes cover more than these government programs. Your payroll taxes may go toward other necessities, such as:

• Local taxes
• State and federal unemployment taxes
• Local, state, and federal income taxes

Let’s look into these taxes to know why they’re vital. Social security allows funding for individuals for their retirement. Medicare is a program that helps certain individuals pay for medical services, such as physician visits and hospitalizations.

In addition to federal taxes, some regions require state and local taxes to be taken from their paychecks. Local taxes fund government services, such as fire services, police, road maintenance, and education. Unemployment programs offer income to your employees if they lost their job.

There are voluntary payroll deductions, such as health insurance and employee stock programs. These are separate from your payroll taxes.

As an employer, you must not only file and pay your payroll taxes but also prepare reconciliation reports and ensure you’re deducting the correct amount from each of your employees’ paychecks.

The amount an employer will pay payroll taxes depends on the size of their business, but most will pay payroll taxes twice weekly. You’ll pay some taxes monthly, such as federal unemployment taxes. State and local tax reporting and payments also depend on your local jurisdiction.

Your Rights as a Taxpayer

Dealing with taxes and finances can be scary, especially if you receive an unexpected tax bill. But never forget that you still have rights.

First and foremost, the IRS must inform you of any resolutions to pay back your payroll taxes. When you develop an installment agreement, the IRS must consider your business income and any debts to work with your budget. You have the right to hire any representative, and that professional can handle the IRS for you.

Steps to Take If You Haven’t Filed Your Payroll Taxes

Did you read that last section and realize you never filed your payroll taxes? Don’t worry, you still have options. Here are the next steps.

Step 1: Don’t Talk to the IRS

You may think it’s best to contact the IRS directly and resolve unfiled payroll taxes. You may also be about to shell out the total cost of the bill. Understand the IRS isn’t in your best interest, and you may make some costly mistakes.

Instead, reach out to a tax settlement company. They will handle all communications with the IRS agents to ensure they can’t use anything against you. Your tax settlement company will also negotiate a payback amount, which leads us to our next point.

Step 2: File Form 433-B

Your tax settlement company will help you fill out form 433-B, where businesses owe federal taxes and can’t pay them immediately. You will need this form to fill out your information:

• Assets and their value
• Debts
• Income and spending for the last three months

To prove this information, the IRS may require certain documents from you. This includes:

• Accounts receivable reports
• Past and recent payroll summaries
• Bank statements
• Monthly business bills
• Year-to-date profit and loss statements
• Business account statements

These details will show what you can afford to pay back monthly in installment agreements. Ensure these documents are updated and state accurate information. Submitting any false information can result in jail time.

Step 3: Set up an Agreement

Fortunately, the IRS is always up for negotiations. Remember, all they want is for you to pay your taxes and pay on time. Because of this, they may offer different installment agreement plans. These include:

• Streamlined installment agreements
• Non-streamlined installment agreements
• Guaranteed installment agreements
• Partial payment installment agreements

These agreements have different requirements, and your business may only qualify for a particular agreement plan. You may also qualify for an Offer in Compromise, where you can settle your tax debt for less than the amount you owe. This would prove what you owe will cause significant economic hardship to your business. Be sure to check with a tax specialist about any programs you may or may not qualify for.

Step 4: Pay Installments on Time 

Once the tax settlement company negotiates a payback amount, the IRS may set you up with a repayment plan. Pay off your debts in full and on time. You should also file any future tax returns on time. This shows you’re in good faith, and that issue was an ignorant error. If you can prove that your business pays taxes, they will be willing to negotiate if future problems arise.

Understand that not paying your installments at all will come with severe consequences. In addition to more fines, you may face liens and even criminal charges. Before missing any deadlines, contact a tax attorney to solve your problems.

Are You Having Problems With Unfiled Payroll Taxes?

Owning a business can be rewarding and profitable, but payroll taxes are one of the many responsibilities on your plate. If you never filed your payroll taxes, getting the right assistance is integral.

There are many tax professionals, and it can be difficult to find the right one for you. This is where we can help. We can refer you to tax relief companies, attorneys, and more. You can contact us on our website or call us at (877) 469-1651.