The new way the IRS collects payroll taxes could affect millions of small businesses.
April is tax season, so you're probably worried about your personal filing. But for many CEOs, the new way the IRS collects payroll taxes from companies with a quarterly payroll of less than $2,500 may be cause for concern. Fran Bartlett, the founder, president, and CEO of Federal Liaison Services Inc., a 13-year-old business that helps companies comply with federal regulations, reports that this year's federal payroll taxes, and the taxes for some states that follow the federal rule, are due quarterly rather than monthly. That could affect about one million small businesses. Start-ups and very small companies should be extra mindful of the new schedule, she says, since few small companies operate their finance and cash-management systems on a quarterly basis. The penalty for missing a payment can be greater than 10% of the payment that was due.
MIKE HOFMAN was previously editor of Inc.com and a deputy editor at Inc. magazine, which he joined in 1996. The site was nominated for a National Magazine Award for Digital Media in 2010, and was named the best business website by Folio Magazine. In 2006, Hofman was part of a team of writers nominated for a Webby Award for best business blog. He lives in New York City. @mikehofman