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Employers have a legal obligation to collect and pay payroll taxes and other business taxes to both state and federal agencies. Any payroll tax violation can have severe penalties for employers. If an employer fails to withhold certain taxes from their employees, both the employer and the employee could face civil and even criminal consequences. Many employees are unaware of their own responsibility if their employer fails to pay payroll taxes.
If you are charged with violating your payroll tax liability as an employer or employee, or believe you are under investigation, you need to contact a professional tax attorney.
When you are dealing with a potential payroll tax violation in Jacksonville, the legal professionals at TaxSmith, LLC, can help you. Failing to withhold and pay payroll taxes is an exceptionally common tax violation, and it’s essential to have a legal advocate. It’s important to limit your personal liability as an employer or employee and avoid trust fund recovery penalties and other fines. You may need representation for an audit, an investigation, or against civil or criminal charges. The sooner you get legal representation, the more likely you are to avoid more serious tax issues.
At TaxSmith, LLC, our team has decades of combined experience working in tax law. We use that experience in your favor and can help you through complex tax issues. We help you understand the situation and provide straightforward guidance. Our team can help you avoid liability and dispute payroll tax penalties. Our law firm was founded on the ideas of care and respect. We understand how frustrating tax issues can be for individuals and businesses. Our attorneys help you find the ideal legal route for your unique circumstances.
Each pay period, employers have to withhold FICA taxes from employee paychecks. This includes a Social Security tax and a Medicare tax. These taxes have to be paid to the IRS (Internal Revenue Service) on time, and the schedule of payment depends on the size of the payroll. If an employer doesn’t withhold these taxes from employee paychecks, the employee is responsible for paying them.
In addition to paying those taxes, an employer is also responsible for other employment taxes, which include:
Failure to pay these taxes on time will lead to interest penalties, which only grow if the employer and employee do not deal with them.
Violating a payroll tax by failing to pay tax withholdings is a very common tax violation, but that doesn’t lessen how seriously it is enforced by the IRS. If an employer fails to pay payroll taxes, they can be charged with a felony.
The liability for payroll taxes is also held by the employee. An individual employee can be held liable for their employer’s failure to pay their taxes, even if they were unaware of it.
Luckily, with an attorney’s knowledge, employers and employees can limit their tax liability by using the right IRS regulations and guidelines.
Misclassification of workers is a common tax dispute, where employers classify employees as independent contractors rather than employees. When an employer uses independent contractors, the contractors are responsible for tax payments, not the employer. However, if an employer misclassifies workers to get out of payroll taxes, they can be subject to serious penalties.
Navigating taxes and IRS investigations is very stressful for many individuals and businesses. Although it may be hard to consider hiring an attorney when you are behind on tax payments, doing so can improve your finances. An attorney can help reduce your tax liability and ensure you do so according to the correct procedures. Your attorney can help you gather important documentation for an audit, dispute your tax calculation, or prove that an employee was responsible for the tax payments. An attorney can also help you settle your tax debts. If you are dealing with payroll tax issues, an experienced attorney can help you determine the ideal course of action.
Payroll taxes for employers in Florida include FICA taxes and state and federal unemployment taxes. FICA taxes are made up of Social Security and Medicare taxes, half of which are paid by the employer and half by the employee. In 2023, the Social Security tax rate is 6.2% for the first $160,200, and the Medicare tax rate is 1.45%. This makes the combined FICA percentage 7.65% in 2023.
Florida does not have a state income tax, so employers do not have to withhold those taxes from their payroll. Florida’s corporate income tax is 5.5%, and the federal income tax ranges from 10% to 37%, depending on the size of the payroll. FICA taxes are 7.65% in 2023. Employers must also pay federal and state unemployment taxes.
An employer is responsible for withholding and paying the employee’s half of FICA taxes, in addition to their own half and both state and federal employment taxes. FICA includes Medicare and Social Security tax payments. However, if an employer fails to pay these taxes, an employee can be held liable by the IRS. Workers who are independent contractors or self-employed are responsible for paying their own portion of taxes.
One way to reduce your payroll taxes is to understand your taxable employees and taxable compensation. Working with a payroll tax attorney can help you understand who is an employee and who is an independent contractor, as well as what payroll taxes apply to different forms of employee compensation. An attorney can also help you make a plan for your unique business circumstances.
TaxSmith, LLC, can help you navigate the many aspects of payroll taxes with confidence. If you are facing an investigation, or even criminal charges, we want to help. Contact TaxSmith, LLC, today.
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