One of the most important factors in payroll processing is staying compliant with the IRS and keeping your client’s business running both smoothly and organized.
Common payroll tax mistakes can cost your clients large penalties. The good news is, they can be avoided. There is no room for error when processing payroll so paying attention to details will help reduce the risk of the following common errors.
1. Incorrect Payroll Tax Return Filings
There are a multitude of Federal and State returns that must be filed for payroll taxes. These may include withholding, unemployment, local and school district taxes. Furthermore, there are many different reporting requirements. If proper procedures are not followed and filings not submitted by the deadlines, costly penalties and interest can be assessed.
2. Be On Time In Making Your Deposits
As an employer, you withhold taxes from the employee and have employer contributions to make. The important thing to know is when these deposits are due and how they must be paid. Federal and State levels determine compliance on when and how payments are to be paid. If your payments are late, stiff penalties and interest can be assessed.
Visit www.irs.gov for deadlines and methods of payment for deposits.
3. State Unemployment Insurance (SUI) Rates Not Updated To Current Year
State Unemployment Insurance Rates are updated annually by most states. These new rates should be updated in your payroll processing software to ensure your taxes are properly paid. If you underpay these SUI taxes, penalties and interest are going to be assessed.
Visit www.1099-etc.com for more information on how our software processes payroll and assists you further with being compliant and organized.