Larry, what are your thoughts on this. My business is not doing very well. I have some serious cash flow issues. I can't make my payroll tax deposits. How much trouble am I in?
Ted
Ted, sorry that you are having problems. My best advise is to do a cash flow budget to determine if there is a light at the end of the tunnel. As far as missing the deposits, this is a big mistake.
Failing to deposit withheld income taxes, Social Security and Medicare contributions, and employer matching amounts on time can be expensive. The government wants its money by strict deadlines. Penalties accrue quickly if your business or organization misses deposit deadlines. As far as the government is concerned this is money that you are holding from them. Not giving it to them timely is paramount to stealing. That is why the penalties are so high.
The penalty for not making deposits on time is:
1 to 5 days late, 2 percent of amounts due.
6 to 15 days late, 5 percent.
16 or more days, 10 percent.
15 percent if notice from the IRS is ignored, plus interest on the amount not deposited, plus 100 percent of the uncollected amounts if the failure to deposit is willful.
Note this grave, personal danger: These penalties can be levied personally against all responsible individuals in a business or organization. The corporate veil is no shield in these situations. Any individual with a responsibility for getting the money to the government on time faces possible exposure to penalties and fines. This includes non owners.
Let me know if there is anything I can do to help.
Larry Kopsa CPA
