Small business payroll management can be complicated and if you’re not calculating correctly, it can end up costing you…severely. Every tax season, up to one-third of all small businesses are subject to payroll-related IRS penalties.
Here are 5 tips that help you prevent payroll tax problems & eliminate common mistakes:
Even if your payroll is done correctly, you could be missing some IRS stipulations. The best payroll services for SMBs are set up in accordance with the IRS and the laws that govern the way taxes are to be figured and filed including:
• EIN. Your SMB must be identified through an Employer Identification Number.
• Cap. The IRS has set a cap for the amount allowed for you to pay an employee or independent contractor before you must report the payment. If you go over the cap by so much as a dollar, you could be fined.
• Laws. You must comply with all IRS laws. Ignorance is not allowed as an excuse. If you don’t know the laws in their entirety, check the IRS website or consult with a tax professional.
Anyone who works for you must be categorized correctly, under the heading of an employee or independent contractor. Failure to do so correctly is one of the most common and costly errors made by small business payroll management. While you are required to pay taxes for employees and follow minimum wage laws and tend to mandatory overtime wages, independent contractors are responsible for their taxes. You cannot simply categorize a worker how you deem fit, however. The Department of Labor in your state has strict rules in place to determine the status of a worker. The IRS can and will penalize heavily for any intentional error or an honest mistake.
Not being aware of the accounting deadlines and returns cannot keep you from getting in trouble with the IRS. It is imperative to not only know the dates but to adhere to them. Even if your payroll accounting is completed perfectly, failure to get the information turned in on time will cost you. If you aren’t able to keep up with the deadlines, you must turn to someone who is. That is when acquiring payroll accounting software you can use properly or hiring a professional to tend to your small business payroll management is vital to your company staying in business.
Some small businesses rely on payroll management software to carry them through. It is crucial to have the most up-to-date program if you are going to put your trust in software. It is also vital that you know how to operate the system and do so or that you hire someone local who does that for you. Software is only as dependable as the person who is behind the helm, so many opt for using the best payroll services for small businesses instead. Even payroll services use programs, but they are efficient at running them and trained to do so without errors that could be the demise of your business. To find a great company, begin searching online for payroll services in Sarasota, FL, or your specific area. You may also want to ask other small business owners what service they trust with their accounting. Finding an “SMBs payroll company near me” is important too because you will want to be in the same vicinity as your payroll service.
The IRS demands accuracy in all areas, including small business payroll accounting. No errors are tolerated. Outsourcing the task is wise because you nor your employees may be able to meet the stringent deadlines and other requirements the IRS places on small business payroll tax completion. Keeping up is complicated but not being able to will cost you. Hiring a local specialist who is trained in the area of small business payroll management is the best step you can take to avoid legal trouble and keep your company flying right.
When it comes to small business payroll management, you can’t afford to get it wrong. The best payroll services for small businesses know and understand the importance of compliance and keep your business safe from costly penalties and fatal errors. To find a payroll service that you can turn to for your payroll needs, search SMBs payroll companies near me for payroll service providers in FL or whatever state you are in. Sift out the services, one by one, until you come up with the payroll company you feel is the best fit for you.