Avoiding the Payroll Tax Penalty
A grueling task for many small businesses is keeping up with payroll. Withholding the correct amount of taxes from your employees’ paychecks and paying them to the government on time is absolutely necessary. You can personally be charged with the Trust Fund Recovery Penalty (or the 100% penalty) if you willfully neglect to withhold and pay the payroll taxes due. The penalty is applied to Social Security and income taxes that are required to be withheld from employee wages.