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Do you really know that your payroll taxes are paid up?

June 16, 2009

Stories like this chill the heart of the entrepreneur:

Felony charges were filed last week against a South Jordan tax preparer who investigators say withheld payroll taxes for his clients' employees and misrepresented what he had done with the money.

...

On top of the payroll tax allegations, Bankhead also is accused of creating and issuing false W-2 forms to victims after scamming more than $58,536 of their payroll taxes between 2002 and 2007, the tax commission said in a press release.

Many businesses couldn't survive if they had to pay a year's worth of payroll taxes a second time.

If you rely on a payroll service to remit your payroll taxes and they steal them instead, you still owe them, as far as the IRS is concerned. While it still is often wise to outsource a payroll department, it is always wise to sign up for the Electronic Federal Tax Payment Service. EFTPS participants can go online to make sure their payroll taxes are actually going to the IRS, instead of a crooked payroll provider's new house or a payroll clerk's account in Bermuda. Sign up for EFTPS and check your remittances regularly.

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