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Tax violations can result in significant penalties, and failing to withhold or deposit payroll taxes to state and federal entities is among the most common forms of tax law violations. If an employer or an employee is facing civil or criminal consequences due to unpaid payroll or employment taxes, it’s important to work with a St. Augustine payroll tax attorney. They can defend your rights and help you negotiate a payment plan with the IRS.
Employers have legal responsibilities to collect and remit employment taxes, payroll taxes, and other business taxes. Employees also have a responsibility for certain payroll taxes, but some are not aware of their own liability if their employer fails to take deductions from their pay. Because of this, some employees may be blindsided by civil or criminal penalties for failing to pay taxes they were unaware they needed to pay. Employers can also find themself unable to meet taxes.
It is very common for employers and employees alike to fail to withhold payroll deductions and fail to pay their payroll taxes. Although it is common, the consequences can be serious. If you are an employer or employee who is being audited, investigated, or charged in St. Augustine, you need a qualified tax professional to protect your interests.
Even if you are not currently facing consequences from payroll taxes, an attorney can help you avoid future liabilities and limit the chances of a costly tax mistake in the future. A payroll tax attorney understands how state and federal tax laws apply to your business and employment and can provide you with guidance through complex matters.
The attorneys at TaxSmith, LLC, have decades of collective experience, which we leverage to provide clear and straightforward tax advice and support for you and your business. We know that payroll taxes and tax law can be overwhelming and frustrating. We want to help you understand how these laws apply to you and avoid tax penalties.
Federal Insurance Contributions Act (FICA) taxes are a deduction from employee paychecks that employers are required to pay to the Internal Revenue Service (IRS). FICA taxes include a tax paid for Medicare and a Social Security tax. When an employer fails to withhold and pay these payroll taxes, the responsibility falls to the employee.
The payment schedule of FICA taxes depends on the value of an employer’s payroll, and these taxes must be paid on schedule. If an employer or employee fails to provide those taxes, they will accrue late penalties and interest, which grow more expensive than the taxes due if left unpaid. Unpaid payroll taxes can even result in criminal penalties.
As well as taxes from the employee’s payroll, employers must pay other employment taxes to both state and federal government agencies. This includes taxes like:
When an employer does not pay their payroll taxes, they could face felony charges. An employee can be held liable, even if they didn’t know that taxes were not being withheld or did not know it was their responsibility.
The misclassification of employees is a common dispute and a violation of tax law. Employers must accurately categorize workers as employees or as independent contractors. Independent contractors are responsible for tax withholdings, while employers are responsible for withholdings for employees.
There are significant differences between independent contractors and employees, and if an employer misclassifies employees so they do not have to pay those payroll taxes, they may face significant IRS penalties.
A: Payroll taxes include unemployment taxes to federal and state agencies and FICA taxes. Calculating these taxes requires an understanding of the current state and federal tax requirements. There are two types of taxes that make up FICA taxes: Medicare and Social Security taxes. The tax rate for each of these taxes changes year to year.
As of 2023, the Social Security rate is 6.2% on the first $160,200 in a payroll. The Medicare rate is 1.45%. The collective tax rate for FICA is 7.65%. A knowledgeable tax attorney can help employers calculate payroll taxes.
A: The payroll tax is made up of several types of taxes and payments. In Florida, the corporate income tax is 5.5%, and the 2023 federal Social Security and Medicare taxes are 7.65%. The federal income tax may be 10% to 37%, and the percentage depends on the size of the employer’s payroll.
Employers are responsible for federal unemployment taxes and the state unemployment tax called Reemployment. Because Florida has no state income tax, employers can forgo withholding those taxes.
A: There is no income tax in Florida, but employees are responsible for their half of FICA taxes if their employers do not deduct those amounts from their paychecks. Employers must pay payroll taxes quarterly. If employees receive paychecks without deductions, they should also pay FICA taxes by the quarterly deadlines. There is no set amount of time that an employee can work and not pay taxes.
A: There is no state income tax, so no withholdings are paid to any Florida agency. However, there are still federal withholdings from employee paychecks. Federal withholdings include FICA taxes, half of which are paid by the employer and half of which are deducted from employee paychecks. If an employer does not make these deductions, the employee is responsible for paying those federal taxes.
It’s much easier to navigate IRS taxes with a tax professional you can trust to uphold your own interests. If you are facing an audit, investigation, civil penalties, or criminal charges, it is incredibly important that you have a tax attorney on your side to gather evidence in your favor or prove the liability was not your responsibility. Contact TaxSmith, LLC, today to see how we can help you.
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