If you have a small business, and you know how important it is to have accurate and efficient SMB payroll management. Small business payroll services near me can make or break your entire business. When running smoothly, it’s an indication your entire business is in order, but when it’s in disarray, you’ll have to pay the price financially and in all other aspects of the company.
Small Business Payroll Management Done Right
This is to ensure your SMB payroll management is up to par. Here are seven mistakes you’ll want to avoid at all costs:
1. Pay Discrepancies
Small business payroll taxes are based on many factors. Overtime, deductions, paid time off, commissions, and more are all considerations when calculating pay. Since different states have different policies regarding payroll and the federal government has regulations about them, too, it’s imperative to keep impeccable records and avoid misclassification when it comes to paying.
Another key factor where small business payroll taxes are concerned is time tracking. Perfecting the way your company keeps up with over time is vital. Federal overtime is a requirement when over forty hours are worked in one week and must be paid at 1.5 times the base rate. In some states, such as Colorado, Nevada, and Alaska, overtime is based on hours worked in a day in addition to the week. Clearly, not getting the figures correct could be devastating to the finances of the business when tax time comes around.
2. Misclassification of Employees
Correctly classifying employees is ultra-important. When an employee is hired, their status must be right because it determines how both you and your employee are taxed. Classifications include salaries, hourly, freelancers, and independent contractors, as well as temporary and permanent status.
Recently, the IRS has been cracking down on those who are classified as independent contractors because many employers used the status to avoid having to provide employee benefits in the past, such as medical insurance. It is vital not only to classify your employees correctly but also to be able to prove it if necessary.
3. Time Matters
Being late on small business payroll taxes can put you in a huge financial bind. There are penalties that continue to mount. There’s no reason not to be punctual when you organize your tax load. If you aren’t able to do so by yourself, you may want to look into hiring one of the small business payroll services near you to help you out. Missing deadlines can even end with your business license being suspended, so be sure to be on time. The IRS Calendar Connector is a useful tool that can help you avoid the mistake of being late. If you see you are going to be late, getting in touch with the IRS is the best thing you can do.
4. Failing to Denote Details
Sometimes, it’s the smallest things that can trip you up when it comes to small business payroll taxes. Those little details can actually cause you to miss an important deduction or be the reason behind another critical error. Not reporting something small can lead to big bucks in penalties, too. So, be sure to make a note of even the smallest facts. Even if you are sure a minor detail won’t matter at tax time, you can make a note of it…just in case. Better to be safe than the rule of thumb when it comes to small business tax details.
5. Inaccurate and Messy Records
It’s next to impossible to be on top of your payroll taxes if you can’t find them or can’t read them. It’s vital to be aware that you not only need accurate, neat records to be able to figure your taxes correctly, but you’ll also absolutely need them in order to get audited. Fines, penalties, and lots of frustration are in store for those who don’t keep good records that are readable and accurate.
6. Failure to Be Aware of All the Facts
If you don’t have a tax professional doing your small business payroll taxes, you may not be aware of some of the important things. Are you missing deductions? Are you failing to report facts that the IRS requires? Ignorance is no excuse, and if you don’t believe it, ask the IRS.
7. Tax Forms Missed
Preparing and sending all the required tax forms to all employees is a dreaded task at the year’s end, but it is imperative. Not turning in the forms on time is a big mistake you’ll want to avoid. For instance, not providing an employee a W-2 on time can rack up a $250 fine. If an independent contractor earns more than $600 with your company, then you’ll need to send him or her a 1099. Be sure payroll is calculated correctly and all the forms are filled out and sent out so you don’t find yourself in dire straits.
How does it All Adds Up?
Small business payroll services near me are available to help eliminate costly mistakes like those listed above. If you are in the market for assistance, simply search for “payroll service providers near me” in Lake Mary, Florida. Once you have a list, narrow it down by contacting and examining each service in order to determine which service is best for your business.
