Payroll taxes and sales taxes

It is important to learn about some aspects when you are starting a business, otherwise things can get dirty and there is a chance that you will have to pay if you acted unprofessional. Tax is one of these important things there are different kind of tax of a company but here we are talking about payroll and sales taxes. The company keeps the tax and when time comes transfer it to the governing agencies. By any chance tax is not paid lot of people will get angry, and that will be bad.

If you are acting on behalf of the company or you are a hired person there are some cases in which you and your possessions will be safe but in case of these two taxes there is no way to save yourself, when it comes to law charges and bankruptcy or other legal actions. If you are the responsible person for company, you hold responsibility to par and report about these taxes and if you do not fulfill your duty so you will have to pay some penalties.  If you have no idea about these form of taxes here is some guideline for you:

Payroll tax is the money an employer holds from his employee’s pay to pay the tax and then give it to the department of treasury on behalf of employee. The wages of an employee from which an employer hold money are income tax, social security, and Medicare. The taxes have to be transferred periodically it is not that these taxes will be paid just once. The tax will be depending on employer whether he is liable for the responsibility or not. the funds that are held by employer is called trust fund. The employer work as a middleman between a worker and a treasury department.

When it comes to sales tax we can say that they are alike payroll taxes. It is important to add the sales tax price with the actual price of the product which company is selling. Company will hold these funds until it is time to transfer them to the state collection agency. These tax price will be applicable until the business is in running condition. When companies sign a check of pay for their employee they put the amount excluding the payroll tax. And one a customer buy something, he pays the sales tax with the actual price to the company so responsibility of transferring these taxes to the related departments is comes on company’s shoulders. Both worker and customer depend on the company for that. Some companies do not fulfil their responsibility and that is considered as a fraud. Because the money they are holding, belong to another person, and they have the money collected so there is no reason for not submitting it.

If you are the owner of a shop or a company, and you have given the responsibility to some other person and you don’t know about these tax, so it is the responsibility of that other person to transmit the tax if he is not doing so, he will be one to pay the penalty.