If you have employees in your business then you are likely subject to withholding tax issues. BBS can handle all your withholding tax compliance issues. As an employee, you are likely familiar with withholding taxes which are also called retention taxes. These taxes are required by the government to be withheld or deducted by the payer of an item of income from the employee’s payroll payments, and then to pay that tax to the state or federal government. In most taxing jurisdictions, withholding tax applies only to employment income. But some taxing jurisdictions also require withholding tax on payments other types of income including interest, rent, royalties, and dividends. State and Federal governments use withholding tax as a means to combat tax fraud and tax evasion, and sometimes impose additional withholding tax requirements on those that have been delinquent in filing past tax returns, or for some types of companies in industries where tax evasion is perceived to be more pervasive.
Withholding tax is typically treated as a payment on account of the employee’s or recipient's final tax liability. When the recipient’s tax returns are filed any excess withholding tax may be refunded or if the withholding tax was insufficient, penalties and interest may be assessed. Failure to calculate and pay correct withholding taxes can create penalties for both employers and employees. Officers and responsible employees can be personally help liable for unpaid withholding taxes in certain circumstances. Determining the correct amounts, paying them on time, and remitting all funds to the correct government agency can be difficult and without proper training can be riddled with mistakes resulting in substantial penalties. BBS can take all the hassle out of this complicated taxing issue and give you the peace of mind knowing that your taxes have been properly withheld, returns filed, and taxes paid.
The starting place for most withholding tax compliance issues is the IRS Form W-4. This form is updated yearly by the IRS and is required for every employee of your company. This authorizes you as the employer to withhold taxes from the employee’s pay and indicates how the amount is to be calculated by including various exemptions and deductions. Failure to have the forms completed properly and signed can result in substantial fines and penalties and can make all your withholding filings incorrect or problematic. BBS can take care of all these issues for you and provide you with professional help to make sure that you are doing everything correctly.