Most trucking companies are not thrilled at the prospect of paying business taxes, but getting saddled with IRS liabilities is even worse. IRS liabilities can place a huge strain on revenue, cash flow, and the ability to maintain operations.
What Are IRS Liabilities?
IRS liabilities arise when trucking companies forget to file or pay their taxes. While almost no one forgets to file their yearly taxes, the quarterly 941 forms sometimes fall through the cracks. These quarterly tax forms show the number of employees a trucking company has, their wages, and how much the company owes in taxes for unemployment and other items. Trucking companies must pay the taxes owed each quarter, but if the amount can’t be covered in one lump sum, they can file for an extension or a payment plan.
Not Paying IRS Liabilities Has Consequences
If trucking companies do not pay IRS liabilities for whatever reason, a notification is sent. If the payment is still not made, the liability is moved to a collections officer. Refusal to pay could result in fines, extra fees, or the IRS stepping in to garnish revenue. Outstanding liabilities can also prevent trucking companies from using factoring services, forcing them to wait a month or longer to receive revenue from clients.
Staying Ahead of IRS Liabilities
In order to pay those quarterly taxes, trucking companies need to have extra working capital on hand. With overhead costs, waiting 30 to 90 days for clients to pay invoices can place trucking companies at a disadvantage early on. One of the best strategies is to use freight factoring services, which convert unpaid receivables to cash within 24 hours so trucking companies can cover overhead costs and build up working capital reserves for growth projects and to pay IRS liabilities each quarter.
Express Freight Finance is a national leader in freight factoring services. Our fast turnaround, combined with the many tools we give to trucking companies to help manage their accounts and check the creditworthiness of clients, have helped to put us ahead of the rest. Put your trucking company on the right path and avoid the stress and financial strain of IRS liabilities with factoring services from Express Freight Finance today.