Is Payroll a Ticking Time Bomb in Your Business?
At one time or another, every small business owner begins to feel like a circus juggler. Before they call on The Payroll Department, they try to stay in the know about employee training and performance, customer service, production and cash flow. For those entrepreneurs who are just starting out, they find themselves serving as the office decorator, plumber and housekeeping crew.
Then there’s the employee record keeping. And we all know how quickly that aspect of business ownership can grow from a little stack into an overwhelming mountain. You’re recording earned vacation hours and sick leave for employees. You have to keep a record of any work completed by independent contractors. You’ve got to keep your thumb on any tax law changes.
Oh yes, and then there’s payroll. No matter how hard you try, when you are this busy juggling so much, you are a mistake waiting to happen. Once you read about these common mistakes, made by the most dedicated business owners, know that The Payroll Department is here! We are your life boat.
We can help business owners avoid these mistakes:
- Misclassifying employees: Small business owners might not be aware that the federal government has strict guidelines relevant to classifying employees. The result is that you are responsible for withholding payroll taxes for statutory employees, but not for independent contractors employed by your business – and you need to be certain every worker is properly classified and reported.
- Filing taxes past the IRS due date: Failure to comply with the due date can result in a significant penalty, based on the total payroll tax amount. Late payroll tax returns also carry a penalty for each partial or full month that you are late. Payroll tax deposits must also be paid on time and if not, result in additional fines and penalties.
- Incorrect or inaccurate forms: As we mentioned earlier, juggling too much can result in mistakes. So if you get in a rush and reports are inaccurate and you over pay or under pay payroll taxes due to miscalculations, the headaches for your workplace will soon follow.
- Submitting incorrect financial amounts: If you submit the wrong amount of payroll tax deposits, the IRS may respond with a financial penalty, ranging from 2 to 10%, depending on the amount and how late you are in filing.
Holding the sometimes single leadership position in a small business can stretch your time and capabilities to the limit. With something as important as payroll, taxes and the IRS, outsourcing payroll services is one of the best decisions you can make – and with the years of experience as a payroll provider, The Payroll Department is your go-to resource.
-Sherri of The Payroll Department Blog Team