Page 221 - Essentials of Payroll: Management and Accounting

ESSENTIALS of Payr oll: Management and Accounting
being remitted and the company’s contact phone number, then darken
the ovals corresponding to the type of tax being remitted (in this case,
always “941”) and the applicable quarter to which the remittance applies.
(Note: The information on this form is entered into the IRS database

with an optical scanner, so write clearly to avoid scanning errors.)
Special handling of tax deposits is necessary if an employer is a
semiweekly depositor and has multiple pay days within the same semi-
weekly period, but which apply to different calendar quarters. If this
situation arises, the employer must determine which portion of the
semiweekly deposit applies to payroll occurring within each of the two
calendar quarters, and make a separate deposit for each portion.

Example. The Red Light Company has a pay date on Saturday,
September 28,2002,and another on Tuesday,October 1,2002.Deposits
for the two pay dates are both due on the following Friday, October 4,
but they must be deposited separately.

Federal Tax Deposit Penalties
The IRS imposes significant penalties if a business does not make its
tax deposits on time, makes insufficient deposits, or does not use the

EFTPS electronic filing system when it is required to do so. Its penalty
structure is:
• 2 percent penalty if deposits are made from one to five days late

• 5 percent penalty if deposits are made 6 to 15 days late
• 10 percent penalty if deposits are made 16 or more days late

• 10 percent penalty if deposits are remitted to the wrong
location
• 10 percent penalty if the EFTPS is not used when it is required
• 15 percent penalty if funds have not been remitted at least 10
days after the IRS sent a payment warning notification

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