Beware: Payroll Penalties

 

When filing business and individual income tax returns, Adam Shay CPA firm Wilmington NC stresses to our clients that the tax returns need to be postmarked and put in the mail by the date they are due. Recently, we have been reminded that this same rule does not apply to other taxes. There are no “2/10 net 30” deals offered by the Federal or State revenue agencies for paying early, but they will assess penalties for filing forms that you may believe to be on time.

A common occurrence of this is for our quarterly payroll filers. The state withholding payments are due by the end of the month following the preceding quarter. For example, withholding for July, August, and September is due by October 31st. The withholding form and payment is technically due October 1st, but the revenue agency allows taxpayers the month to file. This means that if the withholding form and payment is postmarked and mailed October 31st it will be considered late and a penalty can be charged. While we have not seen this with sales tax filings, it is becoming increasingly enforced for payroll.

Fortunately, there are a growing number of online options for both Federal and state agencies where taxpayers can file online and ensure payment is received by the required due date. A good rule of thumb is to send any forms and payment in a week to two weeks in advance to allow for them to process by the due date. We also recommend using an established payroll service for your payroll needs since they are responsible for any late filing penalties that may occur. For a reasonable monthly fee, the time and possible stress of payroll filings is handled by a third party.

Contact Adam Shay CPA Firm Wilmington NC for Guidance

We, at Adam Shay CPA firm Wilmington NC, strongly believe in avoiding unnecessary penalties on top of required taxes. We are happy to answer any questions you have on this issue. Please contact us today by calling (910) 256-3456 or by filling out the contact form on the website.