You Can’t Hide From Your Taxes

by | Nov 8, 2017

Traditional forecasting can be a losing endeavor  

If you're a business owner, I bet you’ve been told you should be forecasting. This traditional advice suggests that there is a specific model to follow or a manual to use. However, as you and I both know, the reality is that when life gets in the way, your forecasting...

Understanding Financial Accountability  

"I'm not here to give you the good news."  I say that phrase to clients much more often than you might think. Because I ultimately want to celebrate their business's success with them, I’m there to tell them the actual state of their company's finances and guide...

Trust and Commitment in a Remote Team 

A couple of months ago, I made my first overseas trek since 2017 – not for vacation – but to meet with the rest of the Fritz Financial Solutions team of accountants in the Philippines. It was important to me to show these women the time and attention needed to...

Client Spotlight: Andrea Freidman 

As a business owner, one of the most significant challenges to overcome is work-life balance. This dilemma has only been exacerbated over the last several years and forced many "traditional" industries, such as the legal profession, to change their ways. Long before...

MEET THE TEAM: Joy mercado, Staff Accountant 

Joy Mercado joined Fritz Financial Solutions just over six months ago after completing an accelerator program with TOA Global, our offshore recruiting partner specializing in the accounting industry. Joy has quickly become an invaluable team member doing highly...

Client Spotlight: Isaac Crawford  

Isaac Crawford is a ray of sunshine who went after his dreams and came out on top when he started his own hair salon. He has been in the hair industry for almost 15 years and has serviced hundreds of clients in Chicago. An inspiration to entrepreneurs, we are excited...

In our past several posts, we’ve been talking about good habits small-business owners should adopt to stay successful. So far we’ve tackled account reconciliation, keeping on top of bills, and staying current with receivables. This week, let’s talk taxes. It’s not a fun subject by any stretch, but it’s one you must face if you want to remain in business. The bottom line is that the more you pay people or the more you sell, the more you owe.

When it comes to liabilities, payroll and sales taxes are completely unique. When you settle up with the power utility, for example, or the landlord who owns your building, you submit the dough with a check in the mail or an electronic payment. With your payroll and sales taxes, however, it’s incumbent upon you to, in essence, send the bill to yourself, set the money aside at the time of the corresponding transactions, and remit payments by the appropriate due dates

It doesn’t matter how small your business is—this is still an item on your to-do list. Even if there’s only one employee on your roster, it’s still your responsibility to submit payroll liabilities to the government agencies for which you’ve withheld them. Depending on the size of your business, this could be monthly or quarterly. Question time: do you know exactly how often you need to submit these deposits, and when you need to submit your payroll tax returns? If you don’t, or you’re not totally sure, it’s a good idea to learn or hire someone to take care of the matter for you. A payroll management firm can pay for itself many times over. Do you have the taxes set aside that you’ve withheld from payroll or collected on sales?

There are good reasons why you should be diligent about payroll and sales taxes—if you don’t, it could sting.  When you withhold taxes from employee payroll checks or collect sales tax, you are doing this on behalf of that party and obligated to submit them to the appropriate agencies. If you withhold or collect these funds and then fail to submit them, essentially you are committing fraud, as far as the government is concerned.  This failure could land you seriously stiff penalties and interest—as high as 30%, depending on how much you owe and how in arrears your company is. Fines escalate quickly when payroll tax returns or payments to government agencies are received late, or not at all. The awful truth: these lofty fines can end up exceeding the original owed amount. In one instance, I encountered a company owing a $9,200 payroll-tax debt end up owing more than $12,000 when interest, fines and penalties figured in. Another client who failed to submit sales tax for several months had to go to court after the state threatened to shut down his store due to non-payment.

Payroll and sales taxes can be confusing—if these details aren’t your bag, feel free to reach out to me at Daliah@MySmallBusinessPro.com and I’ll be happy to help you make sense of things.

Traditional forecasting can be a losing endeavor  

If you're a business owner, I bet you’ve been told you should be forecasting. This traditional advice suggests that there is a specific model to follow or a manual to use. However, as you and I both know, the reality is that when life gets in the way, your forecasting...

Understanding Financial Accountability  

"I'm not here to give you the good news."  I say that phrase to clients much more often than you might think. Because I ultimately want to celebrate their business's success with them, I’m there to tell them the actual state of their company's finances and guide...

Trust and Commitment in a Remote Team 

A couple of months ago, I made my first overseas trek since 2017 – not for vacation – but to meet with the rest of the Fritz Financial Solutions team of accountants in the Philippines. It was important to me to show these women the time and attention needed to...

Client Spotlight: Andrea Freidman 

As a business owner, one of the most significant challenges to overcome is work-life balance. This dilemma has only been exacerbated over the last several years and forced many "traditional" industries, such as the legal profession, to change their ways. Long before...

MEET THE TEAM: Joy mercado, Staff Accountant 

Joy Mercado joined Fritz Financial Solutions just over six months ago after completing an accelerator program with TOA Global, our offshore recruiting partner specializing in the accounting industry. Joy has quickly become an invaluable team member doing highly...

Client Spotlight: Isaac Crawford  

Isaac Crawford is a ray of sunshine who went after his dreams and came out on top when he started his own hair salon. He has been in the hair industry for almost 15 years and has serviced hundreds of clients in Chicago. An inspiration to entrepreneurs, we are excited...

What solution can Fritz Financial find for you?

Schedule a meeting with Daliah Fritz