Common Restaurant Tax Problems and How to Solve Them

New businesses commonly face tax problems and restaurants are no exception. By the time you pay your waitstaff, your vendors, and your rent, you may have a difficult time paying your taxes. Sometimes, restaurants have less profit during their first year in existence, and so they have a relatively small tax bill.  If business improves as more and more diners find your restaurant, your profits may increase, and you might find that you have an unexpectedly large tax bill with seemingly no way to pay it.

Many restaurant owners fear an IRS audit, but more commonly, restaurant owners are contacted by the IRS because they have not paid their taxes, and specifically have not paid their payroll taxes. Effectively dealing with the IRS is especially important in this situation because if it is not resolved, the IRS can close your restaurant and padlock its doors.

Payroll taxes: Payroll taxes are perhaps the most common tax problem faced by restaurant owners.  Payroll taxes that are withheld…