The United States Treasury collects nearly 70% of its revenue through employment taxes, but employers steal from their employees and the United States. By failing to comply with their legal obligations, employers illegally line their pockets with withheld amounts from their employees’ paychecks, gaining an unfair advantage over their competitors. So how do you avoid falling into this trap?
Unpaid employment taxes represent nearly 70% of all revenue collected by the IRS.
Employers are obligated by law to withhold and remit employment taxes on their employees’ wages. As a result, unpaid employment taxes make up nearly 70% of the total revenue collected by the IRS. When last measured, the overall tax gap was $72 billion. As of September 2015, more than $59 billion of this tax remained unpaid. For example, a Tennessee company failed to withhold employment taxes for 16 consecutive quarters in one case. In other words, they did not file Employer’s Quarterly Federal Tax Returns or pay employment taxes on time.
Employers who do not collect employment taxes on their employees’ wages are stealing from their employees and the United States Treasury. The amount withheld is illegally used to line the pockets of non-compliant employers. The IRS can use this to collect employment taxes, so compliance is crucial.
Global employment taxes
Compliance with global employment taxes requires not just compliance with labor laws but a range of stakeholders, including human resources, stock administration, and payroll. In a webinar, experts at Deloitte LLP made a case for global employment taxes. In addition, the evolution of global payroll operations has created the opportunity to address employment taxes on a worldwide scale.
Employees are the most costly and risky part of any organization. Managing wages and incentives is not easy and increasingly complex as organizations grow more international and involve multiple jurisdictions. Furthermore, new business models are bringing a diverse workforce into the mix. So whether your company employs thousands or just a few, global employment taxes can affect your business. Fortunately, Replicon has a variety of award-winning workforce management software solutions to help you navigate these issues.
Calculating payroll taxes
Payroll taxes are generally based on an employee’s gross taxable wages. These earnings include cumulative salaries, wages, and other benefits. This amount does not have any non-taxable income or pre-tax deductions. This number includes Social Security and Medicare taxes and state and local payroll taxes. Failure to comply with these tax obligations can result in heavy fines and penalties. Employers must be aware of their responsibilities and understand how payroll taxes work to avoid penalties.
There are several steps involved in calculating employer payroll taxes. While payroll software is helpful for this, there are some basic steps to remember. First, you must report all activities to the relevant authorities. If you don’t know how to do these tasks, contact an experienced professional to help you calculate payroll taxes. Depending on the nature of your business, this process can become complicated. Therefore, many companies hire a dedicated payroll administrator or use a payroll service provider.
Unpaid employment taxes
You know how vital unpaid employment taxes are if you are a business owner. They can cripple a business, but they can also spread to the business owner and their employees. The first step to avoiding this situation is to find a qualified tax counsel. You can find out if you are liable for the due employment taxes by reading this article. Hopefully, by the time you finish reading this article, you will know what to do to avoid a situation like this.
Unpaid employment taxes are not the only taxes you have to deal with. You’re liable if you were employed but didn’t pay your share of taxes. The IRS can take you to court if you’re not paying your share of employment taxes. The penalty is up to 80% of an employee’s total income.
California has various forms required for employers to report employee wages. California employers need the Quarterly Wage and Withholding Report (QWWR). It lists salaries and personal income tax withholdings for individual employees. Employers must submit this form to the Employment Development Department of California every quarter. They must also file a payroll tax deposit (DE 88) form. These forms are filed electronically or on paper. If you are filing your employment taxes electronically, you should read the instructions before completing the forms.
Employers must keep certain records of employee data. For example, if they hire new employees, they must fill out a form called Form I-9, which requires the employee to provide certain information. The employer must also certify that the documents are genuine. This certification must include the business name, address, and signature of the employer. In addition, the employer must keep all records in a central location to ensure compliance with the U.S. Department of Labor’s regulations.