Penalties for not filing Form 940 / 941
& not paying the Payroll Taxes

IRS may penalize you for the following reasons:

Penalties for failing to file Form 940, and 941

If you fail to File your Form 940 or Form 941 by the deadline:

  • Your business will incur a penalty of 5% of the total tax amount due.
  • You will continue to be charged an additional 5% each month the return is not submitted to the IRS up to 5 months.
  • If in addition to failing to file, you did not pay your owed tax bill you will initially be charged .5% of the unpaid tax amount, and this fee will increase each month the payment remains unpaid. The penalty will increase to 1% ten days following the IRS notice of intent to levy.

File your 941 with the IRS Now and avoid penalties

Only Pay When You're Ready to Transmit to the IRS

Penalties for failing to pay payroll taxes

In case, if you have failed to pay your payroll taxes, you will probably receive a notice from the IRS about the penalty.

The IRS will impose the penalty based on How much tax you owe and when you made the payment.

For example: Consider, you are responsible for paying $3000 to the IRS for the quarter and you have deposited your taxes after 20 days from the deadline. Now IRS will impose a penalty and send you a notice regarding the late payment.
In this case, you will be liable for paying a penalty of $300 which is a 10% penalty rate of your taxes.

Applicable Penalty Rates for not paying taxes

No. of Days the payment delayed Penalty Rate
One to five days 2%
Six to fifteen days 5%
Sixteen or more days 10%
10 Days After Receiving Notice from IRS 15%

File your 941 with the IRS Now and avoid penalties

Only Pay When You're Ready to Transmit to the IRS

Trust Fund Recovery Penalty

If you filed IRS Form 944 last year but will be filing Form 941 for the current year, there will be no penalties if the taxes are paid in full by March 15th, 2019.

Employers must be aware of the “trust fund penalty” which can be imposed on individuals responsible for withholding payroll taxes. The individual is at risk of being held accountable for 100% of the unpaid taxes plus penalties.

How to Avoid IRS Penalties and Interest?

Avoid penalties and interest with the following actions:

IRS penalties are avoidable when you plan ahead and know where to file your Form 941 efficiently. TaxBandits, is an IRS-authorized comprehensive solution for generation and e-filing your small business tax forms.

In order to avoid penalties be sure to deposit or pay your owed IRS taxes by the deadline along with your Employer's Quarterly Tax Return Form. Also, you will need to report your tax liability accurately.

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Form 941/941-PR/941-SS

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