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941 Payroll Tax:

Payroll (941) Taxes (Not dischargeable in a bankruptcy)

A lot of times the 941 payroll tax issue results from either not filing a required payroll tax form on time, or not filing it at all. If you have paid your payroll tax deposits, and simply had a problem with a form, the IRS is usually willing to let you clear it up simply by getting the form to them as quickly as possible. You may be assessed a small penalty, but that’s not always the case.

The Real Problem with 941 Payroll Taxes

The real 941 payroll tax problems are those that result from failing to make the required payroll tax deposits on time and in the correct amounts. If you own a business that has employees, even if that employee is just you and/or your spouse, you have specific deposit requirements.

These are the most common:

Social Security tax

Medicare tax

Federal income tax

Federal Unemployment tax

Federal Employment and Payroll (941) Tax delinquencies can result in the assessment of massive penalties and interest along with the seizure of your business and PERSONAL assets.

Federal Payroll (941) Tax laws give the IRS greater authority to collect what is owed. This authority includes the ability to collect these taxes from the owners and corporate officers. Even if the business is voluntarily or involuntarily closed, the owners/corporate officers are PERSONALLY LIABLE for these types of taxes – and Payroll (941) Taxes CANNOT be discharged in Bankruptcy!

What is Form 941?

Form 941: Employer’s Quarterly Federal Tax Form is the form used by employers to report employment taxes, withholding amounts, deposit amounts, and amounts due to the IRS.

The Penalties of Delinquent Payroll (941) Tax

Delinquent Payroll (941) Tax problems are full of obscene interest and penalty charges, such as:

Penalty for filing a late return or corporate report.

Penalty for making a late deposit or failing to make one.

Interest on the delinquent taxes and interest on the penalties!

Assessment of penalties that no one can seem to adequately explain to you.

Adding the above amounts together, it’s easy to see why Payroll (941) Taxes are often called the “100% Tax.”
Penalties and interest added together can quickly EQUAL 100% of the ACTUAL TAX.

Frequently Asked Questions

What is Form 941 used for?

Form 941 is the Employer’s Quarterly Federal Tax Return. Employers use it to report federal income tax, Social Security tax, and Medicare tax withheld from employees’ paychecks, as well as the employer’s share of Social Security and Medicare taxes.

Can Payroll (941) Tax debts be discharged in bankruptcy?

No, Payroll (941) Tax debts cannot be discharged in bankruptcy. These taxes are considered a trust fund tax, meaning they are withheld from employees and held in trust for the government. As a result, the IRS has stronger collection powers and can hold individuals personally liable.

Who can be held personally liable for unpaid 941 taxes?

Business owners and corporate officers can be held personally responsible for unpaid 941 taxes. The IRS may pursue individuals involved in the business’s financial decisions, even if the business has closed.

What penalties apply to delinquent 941 payroll taxes?

Penalties for delinquent 941 taxes include fines for late filing, late payment, and failure to deposit. Additionally, interest accrues on both the tax and penalties. These charges can accumulate quickly and may equal or exceed the original tax liability.

What should I do if I missed filing Form 941 but paid the taxes?

If taxes were paid but Form 941 was not filed on time, the IRS may allow you to resolve the issue by submitting the missing form promptly. While a small penalty may apply, quick action typically minimizes complications.

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