As an ambitious entrepreneur, interested in launching your own small business, The Payroll Department understands that you have a lot on your mind. As you make big decisions about the future, there’s a lot to consider. You’ve got to mull over the possibilities involving location and leased space for your workspace, logos, employees and training needs. You’ve got to juggle so many different scenarios just to somehow assure yourself success. But did you know that when small business owners fail, one of the reasons is frequently traced to taxes and payroll mistakes? These are the top reasons small business owners find themselves in hot water, heated directly by the flames of the IRS:
- Failing to accurately report information: That’s right, the IRS matches the information reported on 1099s with the entries on taxpayers’ returns. That includes payroll and payroll taxes. When it doesn’t match up, there’s a problem.
- Failing to file certain forms and schedules: If, as a business owner, you feel like you’re trying to do too much, there is a good chance that you will make mistakes. No matter how hard you try to avoid making them, things sometimes slip through the cracks and deadlines are missed.
- Failure to apply proper limitations: For example, only 50% of meal and entertainment costs can be deducted. Some payroll taxes have limitations as well.
- Not keeping good records: Again, you’re reminded of how many hats you wear as a small business If paperwork is sliding into the background, you’ll likely be in trouble soon. This is not only for payroll tax reporting, but for employment and labor law compliance as well.
- Forgetting carry-overs: Certain unused deductions and credits may be carried over from one year and used the next year. If you don’t know this, shouldn’t you call on The Payroll Department?
- Failing to file office deductions: More than 50% of American business owners utilize home offices and often work from home, even those that supply employees and sub-contracted workers with
- Failing to correctly classify workers: Do you understand the paperwork for filing some workers as independent contractors and others as business employees? The IRS has strict guidelines for classifying workers and you must comply with them.
Failing to call on The Payroll Department can certainly make your days longer and your eyes more bloodshot. Failing to call on The Payroll Department can make your business account lighter, too. So make a great decision. Allow us to be your experienced, professional payroll services solution.
-Sherri of The Payroll Department Blog Team