Payroll Tax Debt Relief

You Have the Option to Settle Your Payroll Tax Debt

It’s easy to fall behind on payroll taxes while managing a business. Many employers experience delays and then feel the pressure from the IRS to pay. In some cases, businesses fall so far behind that they stop responding because they can’t settle the debt in a lump sum. This is a mistake, as the issue only worsens with accumulating penalties and fees, which can eventually result in asset levies.

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What is Payroll Tax Relief?

Payroll tax relief is a service provided by the Tax Hardship Center for business owners who have fallen behind on their payroll tax obligations. Whether the taxes were left unpaid due to mistakes, financial difficulties, or business closure, it’s important to resolve the outstanding debt. Our payroll tax relief services evaluate your situation and guide you in finding the best options to resolve your tax liabilities.

What Are Business Owners Required to Withhold from Employees?

As a business owner with employees, you are required to withhold Social Security, Medicare, and federal taxes from the wages of all W-2 employees. It is your responsibility to remit these withheld payroll taxes to the IRS. Additionally, an unemployment tax must be paid for each employee. These payroll taxes should be submitted to the IRS on a quarterly basis.

Categories of Payroll Taxes and Their Withholding Rates

Payroll tax rates can vary annually, so it’s important to check the current year’s rates before filing. Below are the payroll tax rates for 2022:

Social Security Taxes: Both the employer and employee contribute 6.2%, making a total of 12.4%.
Medicare Taxes: Both the employer and employee contribute 1.45%, totaling 2.9%.

For self-employed individuals, the total tax rate is 15.3% for Social Security (12.4%) and Medicare (2.9%).

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Consequences of Failing to Pay Payroll Taxes

Late Fees

The IRS will continue to charge late fees for missed payments. The fees can increase overtime.

Interest

The IRS can charge interest on top of what you owe. As interest accrues, so does the amount of the debt.

Tax Lien

Once your debt meets a substantial amount, the IRS may choose to claim a tax lien on your assets.

Loss Of Business

A tax lien may result in seizure of your property, inventory, and machinery.

Jail

Failure to pay taxes can lead to criminal charges and a conviction with a jail sentence.

Work with a Tax Professional to Resolve Payroll Tax Debt

The easiest way to get your payroll tax debt resolved is by working with a professional tax relief company that has experience with payroll tax resolution. You can try to deal with the IRS on your own, but unless you have a lot of time, patience, and knowledge, the experience is overwhelming for most business owners. An experienced tax resolution company can negotiate on your behalf and make sure you take full advantage of any IRS tax relief program that you qualify for.