One of the most laborious tasks for small businesses is managing payroll. It’s critical you not only withhold the right amount of taxes from employees’ paychecks, but also that you pay them over to the federal government on time.

a teal sticky note with the words "sign here" on top of a tax withholding document; for a blog post about payroll tax penalty for small businesses

If you willfully fail to do so, you could personally be hit with the Trust Fund Recovery Penalty, also known as the 100% penalty. The penalty applies to the Social Security and income taxes required to be withheld by a business from its employees’ wages. Since the taxes are considered property of the government, the employer holds them in “trust” on the government’s behalf until they’re paid over.

The reason the penalty is sometimes called the “100% penalty” is because the person liable for the taxes (called the “responsible person”) can be personally penalized 100% of the taxes due. Accordingly, the amounts the IRS seeks when the penalty is applied are usually substantial, and the IRS is aggressive in enforcing it.


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A bill has been introduced that would entitle working veterans to have Veterans Day leave from working—Veterans Day Off Act.

This would only apply to business with 50 or more employees. Also, the vet had to be employed for at least 12 months.

No stipulations on whether the veteran must be paid. It would be

You’re back from wonderful year-end time off, filled with family and food. And if you’re not prepared for tax season, perhaps some righteous stree.

Not to worry. The January checklist from the APA will  you get through the month without biting off all your fingernails.

  • Confirm 4th quarter and annual wage and tax reconciliations.

The 113th Congress met from April 15 to August 2, 2013. This year, several payroll related bills were introduced. Some are good for companies, some not so good. You decide.

Below is a quick run-down on some proposed legislation.

Paid Vacation Act. This would require employers with 100+ employees to allow one week of paid