Many businesses make payroll mistakes, resulting in payroll tax late payments. The IRS has strict deadlines for payroll-related processes, so businesses must submit their taxes on time. A payroll software can be a great organizational tool to help businesses owners submit payroll taxes on time and with accuracy. AMS provides a quality payroll software to help business owners complete payroll on time and reduce errors.
What Are Payroll Taxes?
The IRS collects a variety of payroll taxes, also called employment taxes, from employers. These taxes include federal income tax, Social Security and Medicare taxes, and federal unemployment taxes. Employers collect a portion of their employees’ paychecks as payroll tax fees and remit these taxes as payments to the IRS.
Employers must file payroll taxes in accordance with IRS reporting due dates. The IRS indicates the due dates of each payment, but employers pay some of the fees on an annual, quarterly, or monthly basis. Employers must keep track of the reporting calendar to ensure they do not miss any payment deadlines.
Consequences of Payroll Tax Late Payment
Businesses face penalties from the IRS when they fail to pay payroll taxes accurately and on time. Employers are responsible for collecting, reporting, and remitting payroll taxes. When employers make mistakes in any of these steps, the IRS imposes consequences until the employer makes the correct resolution. The IRS mainly charges fees and interest as a consequence for any missteps.
A payroll tax late payment occurs when an employer misses a reporting deadline or submits a lesser amount than what they owe. In these cases, the IRS gives the employer a notice and begins to charge interest on the amount due. The deposit penalty increases as the days without payment increase. The lowest interest rate is 2% and the highest is 15%, per an IRS resource. To avoid higher interest rates, employers should pay what they owe as soon as they can. There is an opportunity for employers to provide a reasonable explanation for the late payment in which case the IRS may waive the penalty.
How to File Late Payroll Taxes
To pay late payroll taxes, employers need to use the Electronic Federal Tax Payment System (EFTPS) to submit their payment electronically. Employers will need to have an account and complete the appropriate form for their payment.
AMS Payroll Software Makes Payroll Manageable
AMS Payroll Software is an essential tool for business owners who are looking to improve their payroll process. Payroll tax late payments can happen, but a quality payroll system gives employers more control over payroll and reduces the influence of human error on payroll accuracy. AMS takes a modular approach to our software, meaning business owners can build their software with the features their business needs most. Start out with our base platform, the W-2/1099 Forms Filer, and then add whichever other services you need.
The AMS payroll module automatically calculates local, state, and federal taxes. Additionally, the software is compatible with payroll reporting forms, meaning that you can transfer your payroll information to easily remit payroll taxes and generate year-end tax forms. To try our payroll software, contact our Sales and Information Team at (800) 536-1099 to set up a free demo and ask any questions.