As an owner of commercial cleaning services, there are certain things that you need to know about the taxes that you pay. It is too risky to take your taxes for granted since this can be a basis for losing your business. Small businesses should comply with the policies set by the IRS. The owners should know well the policies on paying taxes because failure to pay taxes can show up in audits and cause penalties as well as federal criminal investigations. The IRS strictly follow their audits and failure to pay taxes immediately qualifies your company to be investigated as well as reported to the Department of Justice.

There is a certain way of calculating payroll taxes accurately. You business should pay exact amounts when it come to taxes because the IRS can make a small miscalculation into a big deal. This may cause you to get into serious trouble. It is highly required for you to keep all records of payrolls to prevent you from getting into trouble should mix ups happen.

What is the first step in calculating your payroll tax?

You need to have all your employees fill up a W-4 form to be able to calculate the taxes based on the employees marital status and number of dependants he has. This form which can be obtained from the IRS can help in an orderly calculation of the taxes for the federal government as well the state government.

What are the things about payroll taxes that small businesses should know?

There are three penalties which your business can be charges with – failure to file, failure to pay and failure to deposit. These can really have damaging effects to your company. If you are charged with a penalty, your tax billing can increase in large amounts. These can add about 33% and the interest if you do not pay at a certain time frame given to you, usually 16 days after filing the Payroll Tax Return (941).

The IRS has considered that small businesses, including cleaning services are the largest source of unpaid taxes. As a result, the IRS has targeted small businesses with the strict enforcement of increased tax compliance particularly of economic crises. With the aggressiveness of the IRS, the cleaning companies can be lost. Failure to settle tax issues can result in seizing business equipments and property. The IRS collection officers can ask you to shut down your business even if they do not have any court order with them.

For business owners who have taxes owed, the IRS can come after them. It is illegal to borrow from payroll taxes. Companies should not use the money they collect from payroll taxes to pay for operating expenses. The IRS has a direct access to the Trust Fund Recovery Penalty (TFRP) against shareholders and the owners. They enjoy the privilege of being the only creditor that can go after the individuals who have violated the laws when it comes to tax payments.

As business owners, you should be able to responsibly pay your taxes. Along with this, you should also know these things about payroll taxes so that you will not be in trouble. Remember that your business can be shut down if you have any penalties from the IRS, it is not something that is worth risking, so make sure that you follow the policies set by the IRS.

For more: How to start a cleaning service