Business Taxes

[Dr. Bob]

I am CFO of a small business and our payroll and unemployment, etc, is small enough that we pay the IRS about $1000 a quarter on Form 940 and 941. (Not our taxes, just the FICA and such we owe for employees)

We do not have to pay monthly or have direct deposit since it is small and we write a check.

Someone mentioned how sad they were that this changed for 2011 and EVERY business has to pay monthly by electronic - no quarterly checks.

Anyone hear about this?

 

[InTheLight]

I am CFO of a small business and our payroll and unemployment, etc, is small enough that we pay the IRS about $1000 a quarter on Form 940 and 941. (Not our taxes, just the FICA and such we owe for employees)

We do not have to pay monthly or have direct deposit since it is small and we write a check.

Someone mentioned how sad they were that this changed for 2011 and EVERY business has to pay monthly by electronic - no quarterly checks.

Anyone hear about this?

Yep. I'm the owner of a small business that does monthly payroll tax deposits. November was the last month for making paper deposits via the 8109 tax coupon and a printed check. No more making your deposit at the bank. It's all electronic going forward. I made my November deposit online. It's a fairly easy process once you get your tax ID set up with a password.

Also, you (and I) had better make the deposit online today since the electronic deposits don't post until the day after you make them. If you wait until tomorrow to make the payment it won't be 'received' by the IRS until Wednesday, technically a late payment and subject to a fine.

Actually, I'm not certain that quarterly depositors must do it electronically but I do know that monthly depositors must do so.

Added: I presume you know about the reduction of 2% in the employee portion of FICA withholdings?

 

[Dr. Bob]

Need the info for quarterly since we are far below the minimum needed for monthly

And no, no idea about 2% anything.

I am in the "middle of nowhere" and cannot get ANY straight info from the IRS. Hence looking for help

 

[InTheLight]

Looks like quarterly payers are included in the mandate to pay withholding taxes electronically:

http://www.irs.gov/pub/irs-pdf/i941.pdf

See first page, "What's New".


For FICA, the employer withholding rate is the same as before, 6.2%. However, you will now withhold 4.2% from the employee portion of FICA.

http://www.irs.gov/pub/irs-pdf/p15.pdf

See first page, "What's New", Social Security and Medicare Tax for 2011.

 

[billwald]

Interesting! In the bad old days US cash could not be refused for payment of taxes and debts. Now some utilities refuse cash. Next step is to eliminate cash?

 

[Zenas]

Looks like quarterly payers are included in the mandate to pay withholding taxes electronically:

http://www.irs.gov/pub/irs-pdf/i941.pdf

See first page, "What's New".


For FICA, the employer withholding rate is the same as before, 6.2%. However, you will now withhold 4.2% from the employee portion of FICA.

http://www.irs.gov/pub/irs-pdf/p15.pdf

See first page, "What's New", Social Security and Medicare Tax for 2011.

Quarterly payers can still send in a check with their 941 unless it is over $2,500.00. If it's more than $2,500.00 per quarter you must make monthly, or weekly, deposits. What you can't do anymore is to make a tax deposit using a check with Forms 8109 or 8109B. Now this must be done electronically. Electronic filing sounds intimidating but it's really pretty easy. This year for the first time I filed my 1099 Misc. forms electronically and I will never go back to mailing them in.

 

[Salty]

Interesting! In the bad old days US cash could not be refused for payment of taxes and debts. Now some utilities refuse cash. Next step is to eliminate cash?

Look near the upper right side of a $1 bill (right below "The United") and it says "This note is legal tender for all debts, public and private"

Who is willing to make a court case out this?

 

[rsr]

Not me.

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

http://www.treasury.gov/resource-center/faqs/Currency/Pages/legal-tender.aspx

 

[rsr]

My reading of the literature suggests that you may still pay quarterly. The Federal Register entry says that " the regulations do not change the existing de minimis deposit rules allowing taxpayers with tax liabilities under certain thresholds to make a payment with a return. For example, under the de minimis deposit rules for employment taxes, that is, social security taxes, Medicare taxes, and withheld income taxes, an employer with a deposit liability of less than $2,500 for a return period may (1) Remit employment taxes with their quarterly or annual tax return, (2) voluntarily make deposits by EFT, or (3) use other methods of payment as provided by the instructions relating to the return."

You might try the Wyoming SCORE office (http://www.scorewyoming.org/) and see if they can put you in touch with someone who had the definitive answer.

 

[billwald]

The IRS requires businesses over a specified size to pay quarterly taxes electronically. I think SS will soon stop mailing checks and only pay electronically.