If you are self employed person and you have no employees, you don't have to take a salary and give yourself a W-2 at the end of the year. The way it works is that you calculate your net income and you calculate the income tax on that income.
Then you add to that your social security that a regular employee pays. But unfortunately you have to double the social security and Medicare amount that you calculate. You send this amount quarterly to the IRS.
You double the amount of social security and Medicare because you pay your share as an employee and then you pay the share of the employer as well. As a self employer you wear two hats, the employee hat and the employer hat as well.
To understand the significance of this, think if you have a net income for the year of $100,000. Just social security and Medicare alone before you pay a dime of income tax is about $0.15/dollar or $15,000.
Perhaps that explains why most people with tax problems are from the self employed group. For one, no one withholds tax from them. And then they have to double the amount of tax they did not pay.
Some self employed folks owe hundreds of thousands of back taxes to the IRS. It is often prohibitive that drives some out of business unless they can reach a tax settlement. The tax resolution for payroll tax problems often take form in the shape of an installment agreement, Offer in Compromise, or if you cannot pay only temporarily, the entity may be declared as currently not collectible.
Final word about payroll taxes is that the IRS takes the payroll tax debt very seriously, especially if it relates to trust fund; that is the tax the employer collects from the employees and never deposits with the IRS.
This tax problem is so serious that they not only hold the corporation liable for this tax debt but also the stockholders personally liable for it. They go even beyond that to hold the employee who has the authority to sign the check to be liable for this tax debt as well.