Payroll Taxes…………………
This Could Be You

Steve Cook, CPA
Last updated: July 12, 2021

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For some reason that is total beyond my comprehension, business owners think that “meeting payroll” is simply having enough cash in the bank to cover the net pay checks released. Dear Mr. Business Owner. That is not the cost of your payroll.

When you issue a paycheck, it is the gross wage less hold back items. Hold back items typically include Federal income tax withholding, Social Security and Medicare taxes, pension plan deductions and other employee items. The employer must also pay the company portion of the Social Security and Medicare taxes.

The business owner is 100% liable for paying the net payroll check and all of the associated taxes and deductions that flow through payroll.

So what happens if the business doesn’t comply?

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New York: Business owner Dergei Denko, of Queens, has been sentenced to 20 months prison for failing to collect and pay over the IRS $732,462 in employment taxes. He will also service an additional one-year probation and is required to pay the taxes plus penalty and interest.

He owned and operated a plumbing contracting company. From 2010 through 2014 the owner cashed more that $5 million in checks made out to companies he owned and operated to fund an off-the-books cash payroll. He did not report the cash wages to the IRS, filed false employment tax returns and did not pay to the IRS the employment taxes arising from the cash payroll. Mr. Denko admitted to causing a total tax loss of $732,462.

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Let Lucy get your books tax-ready.

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steeve-cook

Steve Cook is CPA (Certified Public Accountant) with almost 40 years expert saving his client money while keeping out of IRS trouble. He’s the President of LucyOnTheGo.com, which will completely taking care of bookkeeping, so you can your run business. Sign-up for a free consultation with him or give him a call (210) 405-8747 – he’ll actually pick-up.

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