The 2009 Tax Return is shaping up to be a particularly troubling one for many businesses. Some businesses are running the numbers and finding that cash simply isn’t around to pay the tax balance up front.  If you find your business unable to pay on time, filing for an extension could be an option.

Taxpayers should be aware that not all payments should be delayed, especially payroll taxes. The Street reports on the possibility and consequence associated with tax payment extensions.

Delaying payroll taxes is even harder and comes with its own risks for owners and their companies. “As an employer, you have a fiduciary responsibility to withhold your employees’ share of Social Security, Medicare and federal income taxes,” says Doug Cates, a partner at the accounting firm Cherry, Bekaert & Holland and leader of its Owner Managed Business group. “The employer is acting as the trustee of a trust fund.”

Delaying these tax payments can result in monthly penalties and interest as high as 25 percent. While payment delays for payroll taxes are possible, they apply only to past due amounts. Future payments will still need to be made on time.

“Because of the high carrying costs as well the liability issues, you never tell an owner not to pay their payroll taxes,” Cates says.

Your full tax burden is due no matter the payment plan worked out with the IRS. That said, filing for an extension does not have to be a painful experience. Businesses should act with the proper amount of due diligence and plain dealing.

“The IRS collection division is generally easy to work with,” Cates says. But you’ll be in much better shape if you take the initiative and ask for help: “If you know you’re getting behind, you want to contact them before they contact you.”

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