A Payroll Service Can Help with Employer Tax Related Responsibilities
As a small or medium size business owner it seems you have to be a jack of all trades. The stress is constant and you must be able to keep up with supply and demand, hiring and firing, shipping and receiving, sales training and everything else associated with running your business. Where would you find the time to learn everything there is to know about employer tax responsibilities, monthly forms, compliance, deposits and even tax credits? The fact is you just do not have the time left in your busy day.
In order to keep your business running efficiently and profitable you hire professionals in their respective fields and trust them to do their individual jobs. Unless your business is a one-person consultancy it is likely you cannot do everything yourself. Why worry with payroll taxes, W-2's, monthly and quarterly reports and the like when you can outsource this function to a trusted payroll service?
What does the federal government expect from you?
This list is not meant to alarm you. It is, however, only a partial list of the knowledge that is required for the IRS alone. It does not cover any state or local tax requirements.
- Introductory Material
- Electronic Filing and Payment
- Hiring New Employees
- Paying Wages, Pensions, or Annuities
- Non-payroll Income Tax Withholding
- Change of Business Address or Responsible Party
- Private Delivery Services
- Filing Addresses
- Dishonored Payments
- Main Information
- Employer Identification Number (EIN)
- Employee's Social Security Number (SSN)
- Wages and Other Compensation
- Accountable plan.
- Non-accountable plan.
- Per diem or other fixed allowance.
- 50% test.
- Health Savings Accounts and medical savings accounts.
- Nontaxable fringe benefits.
- Fringe benefits that are treated as paid.
- Valuation of fringe benefits.
- Withholding on fringe benefits.
- Depositing taxes on fringe benefits.
- Supplemental Wages
- Payroll Period
- Withholding From Employees' Wages
- Income Tax Withholding
- Social Security and Medicare Taxes
- Part-Time Workers
- Depositing Taxes
- When To Deposit
- How To Deposit
- Deposit Penalties
- Federal Unemployment (FUTA) Tax
- How To Use the Income Tax Withholding Tables
- Wage Bracket Method
- Percentage Method
- Alternative Methods of Income Tax Withholding
This is a lot to grasp and in order to remain abreast of everything that is required a small or medium-sized company would need to hire several employees who are very knowledgeable about all the rules, regulations and any changes that are made. We haven't even mentioned the actual payroll process.
A good, trusted payroll service can take care of everything and keep the wheels of industry greased so you can go on about your business.
What a payroll service will do for you
- Pay employees, tax work, and create reports. Business owners simply let the processor know the hours their employees work and the pay rate and the service handles the rest.
- Calculate and state or federal deductions that the employee is responsible for paying.
- After the deductions are complete, the service will issue the employee payment, usually in the form of a direct deposit or via check.
- Payroll processing companies file and deposit all of the federal, state, and local taxes that your business is responsible for paying. This includes payroll taxes withheld, employer's share of FICA, Federal Unemployment Tax and any state or local form requirements.
- Payroll processing companies typically create reports directly for the business owner. These contain summaries of what your employees are making, where your money is going, and other valuable information.
- At year's end they will provide 1099's and W-2's for all of your employees.
Payroll Services can keep you abreast of tax credits
A payroll service will help you take into account factors you may not have even thought of in finding potential tax credits. Credit incentives can be based on multiple factors such as job creation, the location of your business, research and development, training programs, and cost segregation.
Many businesses miss out on these tax credits just because they feel they don't have time to do the paperwork, or lacked the knowledge that they qualified for such credits. A payroll service can help you calculate payroll taxes accurately by tracking legislation and regulation, providing comprehensive year-end reports, and maintaining documentation of wages and hours worked.Ready to Compare Payroll Services Price Quotes?