A common question accountants get is “am I handling my payroll correctly?” How can you be sure you are withholding the required amount? Are you paying your unemployment taxes? Are you filing payroll returns on time?
If you cannot answer these questions confidently, you may not be doing it right! Not paying the correct amounts at the right time can have some serious consequences, including fines and penalties.
An easy solution to these challenging questions is to outsource your payroll.
Some things the third party service providers do:
- Prepare the paychecks for your employees
- Prepare and File Forms 940 and 941 for your business
- Make federal tax deposits and federal tax payments, and submit this information for the taxes reported on the Forms 940 and 941
- Prepare Forms W-2 for your employees
There are many payroll companies out there, and you must be diligent in finding a reliable one. Simply hiring another company to do this work for you, does not make you exempt from being held responsible for any problems that may arise.
- You, as the employer, are the one held liable for all taxes, penalties and interest due, even if it is due to the payroll provider filing something late on your behalf.
- You should confirm the payroll service provider is using EFTPS (Electronic Federal Tax Payment System) so you can verify that payments are being made on your behalf, by logging into your account periodically.
- Any notices regarding issues with your account from the IRS will be sent to you, the employer. The IRS suggests not changing your address of record to the payroll service provider because it will limit your ability to be informed of tax matters involving your business.
By choosing a reliable payroll service provider, you can streamline your business operations, save yourself time and be confident your payroll is properly managed. Contact your accountant to get a referral to a great payroll service provider today!