BUSINESS TAXES (OVERVIEW FROM
INTERNAL REVENUE SERVICE)
The form of business you operate determines what taxes you must pay and how you pay them. The following are the five general types of business taxes.
Colorado employers must register for their Colorado income tax withholding licenses at https://www.colorado.gov/pacific/tax/register-be-withholding-submitter and their Colorado unemployment tax licenses at https://mybiz.colorado.gov/intro as soon as possible. Other states/localities may be applied for on their websites. I will be glad to assist with the requirements for Michigan, Florida, Pennsylvania, and other states that we and I service as well. Get full-service payroll assistance by hiring us at Intuit PayCycle or QuickBooks Remote Payroll, or by engageing another reputable payroll provider.
Employers must withhold employee income taxes, social security taxes, and medicare taxes due. These are the "trust funds" that must be deposited with the governmental authorities by the due dates, along with the employer taxes due. Employers send Form W2 out to employees by a month following the close of the tax year. They send a new Form 1099-NEC, Nonemployee Compensation (previously Form 1099-MISC, Line 7) for business taxpayers who pay or receive nonemployee compensation.
Full-service Intuit Payroll Department clients get their employer/payroll taxes calculated for them during each run of payroll. They authorize us to deduct their funds from a designated bank account on the 10th of each month for monthly taxes due on the 15th. (Most small businesses are on a monthly payment schedule per IRS laws. Larger clients with bigger payrolls may be required to pay more frequently.) Intuit Payroll Department sends courtesy reminders to fund your accounts for employee paychecks and taxes about 3 days in advance of the 15th. You might want to mark your calendars for the 10th as well to give you more advance planning. We also prepare your quarterly and annual employer returns, crediting you with the estimated tax payments made, and file them for you by on or before the due dates. This includes your W2s, 1099-NECs, and 1099-MISCs from our Intuit Payroll Department and our Intuit Accounts Payable Department. Jeanine provides a courtesy annual internal audit of the payroll and accounting for full-service accounting and payroll clients at the end of each year.
The IRS released a revised Form 941, Employer’s Quarterly Federal Tax Return, and its instructions to be used beginning with the second quarter of 2020 (due July 31, 2020) and containing updates to accommodate reporting of COVID-19-related employment tax credits and other relief.
The IRS sends Letter 2800C, also called a “lock-in” letter, (see Withholding Compliance Q&As and view the Lock-In Letter Video) to instruct employers to follow a specific federal income tax withholding arrangement for an employee who doesn’t have enough income taxes withheld from their wages. The employee has 60 days from the date of the letter to discuss the determination with the IRS before the withholding arrangement takes effect.
Jeanine can help you with your tax compliance including researching your requirements, preparing and reviewing tax returns, and representing you in IRS or state/local proceedings. She can help with:
1) employment and payroll taxes,
2) income taxes,
3) sales & use taxes,
4) excise taxes, and
5) property taxes.
The IRS recently reminded businesses of their responsibility to file Form 8300, Report of Cash Payments Over $10,000, and encourages e-filing to help them file accurate, complete forms. A fact sheet helps businesses understand how to report large cash transactions. Unfortunately, taxpayers who do not report cash receipts of income are technically non-compliant and could be assessed penalties and interest on these amounts if the Internal Revenue Service should happen to discover the payments in client bank accounts or as expenditures for lifestyles above the income reported on tax returns. In a worst case scenario, taxpayers with significant consistent under-reporting of income could be prosecuted for income tax evasion (intentionally evading tax compliance liabilities). It is better to report cash renumerations than to hide your income and it is literally the law. Be tax compliant and pay your fair share of taxes.
Recommended readings include: https://smallbusinessresources.wf.com/help-protect-your-business-from-email-scams/ ; levies will not be imposed on bank accounts that contain PPP funds." Source: Leading Tax Forward by AICPA Tax Section, February 9, 2021. Don't forget that there are business education resources at http://www.examhttps://cp7.cpasitesolutions.com/~bctincje/BusinessEducation(Multiple Providers).phpple.com where multiple service providers offer webinars and seminars remotely at costs of free to market priced charges. Get An Identity Protection PIN (IP PIN) (https://www.irs.gov/identity-theft-fraud-scams/get-an-identity-protection-pin).
Jeanine is an Enrolled Agent (EA), federally licensed by the US Department of the Treasury, to represent taxpayers in Internal Revenue Service proceedings. Her licensing required passing a 15 1/2 hour test over the US Tax Code including income taxation, employment taxation, IRS procedures, and ethics. Jeanine completed annual multiple hours of continued professional education classes to maintain her license and improve her practice.