New Century Financial

A little while ago, we discussed the importance of getting a Certificate of Good Standing for your business, the process involved, and the advantages. Going beyond that, it is important for businesses to remain in good standing with the IRS, as well, in order to avoid fines, fees, liens, or worse.

Good Standing with the IRS Means Being Pro-Active

A long time ago, staying in good standing with the IRS was a simple as paying your taxes. While paying your business taxes is extremely important, remaining in good standing takes a bit more these days. We now live in an economy and political climate where we do things electronically, and tax laws are subject to change at a faster pace than ever before. Remaining in good standing means taking a pro-active role with finances. For small business owners who are keeping their accounting in-house, this means watching schedules to file business taxes, quarterly 941 forms, and

If you own a business, you know how important cash flow is for thriving a growing. While maintaining a strong cash flow is essential to success, ensuring your company has no business liabilities with the IRS is equally important. Outstanding tax liabilities can lead to collections, which can place a severe strain on cash flow with very few options, and as we’ll see, even factoring won’t be able to solve IRS liability problems.

Business Liabilities and the IRS

IRS business liabilities take many forms. Some businesses miss the window to file their 941 forms quarterly, only to find out that they owe the IRS money based on their earnings and the size of their workforce. Another reason could be not paying unemployment taxes, or income taxes – either for the business or personal income tax filings as a business owner. All of these things can send up red flags with the IRS, and they can take measures to ensure the

The IRS requires businesses of all sizes to make 941 payments according to a regular schedule. 941 payments are necessary for any business that has listed employees, including the owner, so that the various employment taxes can be accounted for without repercussions. Most 941 payments include income tax withholdings, social security, and Medicare/FICA. Businesses must account for these payments for anyone on the payroll who is not a contractor or unpaid intern.

Breaking Down 941 Payments

The 941 payments form can be broken down into six basic parts for employers. The first part is relatively simple, and asks for the employer’s identification information and which quarter the form is being filed for. The second section is the most essential, because employers need to list the number of employees, the amount they earn, and the taxes owed. The numbers listed in this section will help determine if your business owe