What do employers do with the money they've withheld from you before they get sent in? Where do they deposit it?


The money gets sent to the IRS through the EFTPS system. Depending on the amounts, the employers are required to deposit it on a monthly/semi-weekly basis, so they don't get to keep the tax money for long.

Failure to deposit the payroll taxes on time is one of the most heavily penalized IRS offenses. This area of violations is called "trust fund violations". It is one of the very few areas in which employees may be liable for corporate misdoings (i.e.: an HR or accounting manager responsible for payroll may be personally liable for trust fund violations).

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    There are similar systems and requirements for other federal and state deductions. – mhoran_psprep Apr 25 '16 at 14:44
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    For most, if not all, corporate tax remittance EFTPS would be a requirement, but the heavy penalties and personal liability is quite unusual. States impose similar requirements re their payroll taxes as well. – littleadv Apr 25 '16 at 14:52
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    Do keep in mind that this applies to individuals as well. If you have substantial income that is not subject to withholding, you are required to submit quarterly estimates. Further, if your end-of-year final payment is > (IIRC) 10% of your total tax bill, you will be fined for failing to submit proper estimates. – Perkins Apr 25 '16 at 19:25
  • @Perkins I don't doubt it, but what makes it so bad not paying taxes for employees is that it isn't your money, it's the employees' money, making it something very similar to theft. So it's worse than not paying company taxes (which is your money), or your own taxes (which is your money). – gnasher729 Apr 25 '16 at 22:01
  • @Perkins: It's $1000 in taxes, irs.gov/Businesses/Small-Businesses-&-Self-Employed/… – apscience Apr 26 '16 at 7:03

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