Payroll tax deposits are accelerated under new rules beginning in August

Article Abstract:

The Revenue Reconciliation Act of 1989 added Section 6302(g), which accelerates the deposit of payroll taxes for certain employers beginning in August 1990. Under Section 6302(g), taxpayers required to make eighth-monthly deposits of FICA and withheld income taxes must make those deposits on the day after $100,000 or more of such taxes is owed. Employers are allowed a safe haven, in which they can deposit 95% of the taxes and pay the other five percent with the first required deposit after the fifteenth day of the next month. Penalties for failure to deposit are two percent of the under-deposit for less than five days, five percent for less than 15 days, and 10% for more than 15 days. The penalty rises to 15% 10 days after a delinquency notice is sent or on the day notice for immediate payment is made.

Laws, regulations and rules, Withholding tax

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In bankruptcy planning consider federal and state law

Article Abstract:

Tax practitioners must be cognizant of both federal and state bankruptcy laws to avoid costly mistakes in bankruptcy planning. Federal bankruptcy law often preempts state law, particularly in the areas of reporting and taxation of income, privileges, and property. Bankruptcy cases typically are begun under either Chapter 7 or Chapter 11. The commencement of bankruptcy creates the bankruptcy estate, a new type of taxpayer, under Section 541 of the Bankruptcy Code. The new estate consists of all the property from the debtor, with the exclusion of income from personal services derived after the commencement of the bankruptcy case. Generally, creditors are barred from collecting unsecured claims until after the taxpayer is discharged from bankruptcy.

Interpretation and construction, Planning, Bankruptcy law, Bankruptcy

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