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Payroll Taxes Can Follow You Personally

Payroll Taxes Can Follow You Personally

There’s one area where contractors get into serious trouble:

Payroll taxes.

When you withhold:• Federal income tax• Employee Social Security• Employee Medicare

That money is held “in trust.”

It’s not yours.

If payroll taxes aren’t paid, the IRS can assess the Trust Fund Recovery Penalty.

That means they can go after:• Owners• Partners• Officers• Anyone with check-signing authority

An LLC does NOT shield you from this.

Construction cash flow is volatile. Retainage delays. Clients pay late. So contractors “borrow” payroll tax money temporarily.

That’s the most dangerous financial decision in the business.

If you fall behind:• Stay current on new payroll first• Designate payments properly• Don’t ignore notices

Payroll taxes are not just another bill.

Handled correctly → routine compliance.Handled wrong → personal liability.

This is not an area to “figure out later.”