Do you have employees? If so, you’ll need to deposit payroll taxes. This includes federal income tax, Social Security, and Medicare taxes. As part of your employer obligation, you must file Form W-2 for reporting employee compensation. There are requirements for filing returns and making deposits, and the funds must be held in trust until paid to the IRS.
If you fail to deposit your payroll taxes, the IRS will assess penalties and interest fees on any unpaid taxes. The best way to avoid payroll tax debt is to file and deposit payroll taxes in a timely manner.