If your business has employees, you must pay employment taxes. The
payment system can be a bit confusing, so this article discusses how to
go about depositing employment taxes with the IRS.
Depositing Employment Taxes
To pay employment taxes, you must deposit the money with the IRS. As is
typical with tax situations, the payments are not actually made to the
IRS. Instead, you must deposit the employment taxes with a federal
depository. Moving the burden to the private sector, the IRS requires
most banks to act as depositories. If your business has just started
hiring employees, ask you bank if they act as a depository. If they do
not, you may want to change banks.
To deposit the taxes, you forward money per the bank specifications.
You will also need to file a Federal Tax Deposit Coupon, Form 8109,
with the deposit. The IRS typically sends these forms to you at the
beginning of each calendar year. If you don’t receive any, you can
download the form from the IRS site or ask your tax professional.
When To Deposit
You must deposit employment taxes either once or twice a month. The IRS
will send you a schedule at the end of each year for the subsequent
year. As a general rule, you want to file within a few days of each pay
period.
Failure To Deposit
Collecting employment taxes is a high priority of the IRS. Since the
taxes include money deducted from an employee’s paycheck, the IRS views
an employer’s non-payment as a form of theft. If you fail to pay, you
can expect the IRS to come down hard on your business and, potentially,
shut it down. In short, make absolutely sure you deposit the employment
taxes.
In Closing
There is no other way to put it – paying employment taxes is a pain. Just make sure you pay them to avoid the wrath of the IRS.
