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Common Payroll Problems (and how to fix them).
Compiling payroll can be a headache, regardless of how big your business is. Constant changes in state and federal tax and employment law make paying employees and filing taxes complicated and time-consuming.
Tedious, stressful work is also ripe for errors. Suddenly, you’re wasting large amounts of time just making sure you stay compliant—and that’s not to mention the money these mistakes might be costing you.
Here are some of the most common payroll problems that businesses face as well as, we think some good solutions.
Common Payroll Issues:
- Managing Overtime
- Quarterly Payroll Payments
- Ineffective Time Records
- Multi-State Complications
- Untimely Payroll Processing
Considering Outsourcing As A Solution.
Payroll management is a business function that, along with taxes and other HR functions, is often outsourced. This means your HR team can concentrate on more important matters, such as increasing productivity and employee engagement.
However, as a business owner or manager, it is quite common to think of "outsourcing" in terms of an "expense". One of the first questions that come to mind is usually, "What's it going to cost?" But outsourcing can actually be a very cost-effective move, and one that can free up valuable time and resources within your organization.
It should, in fact, be viewed as an investment.
In addition to resolving the common problems in managing your payroll, you can include the peace of mind of knowing that your other HR processes are being handled competently, accurately, and on time. On top of that, you can be assured that the accountability and liability for compliance rests with your vendor, freeing you from the constant pressure of staying fully informed and compliant with the ever changing – and growing - rules, regulations, and legislation. MATTERS -HE TOG
Most tax problems are between you and the IRS.
The IRS takes it seriously, but ultimately just wants to get its money out of you. If you’re having a payroll tax issue, though, the rules are completely different.
A third group of people are involved – your employees – and the IRS will step in to protect them.
When you don’t pay your payroll taxes on time, the IRS considers you a thief. To the IRS, you’re stealing your employee’s money, and they take it very seriously.
Payroll tax penalties work differently from regular income tax penalties. The combination of failure to file, failure to pay and failure to deposit penalties can increase your tax bill by 33 percent, not including interest, if you’re just 16 days late paying after you file your 941 late. This is a drastic increase — much more than what it would cost to borrow the money to pay the taxes.
If you’re behind on your payroll taxes, though, penalties and interest are the least of your worries. The IRS has no tolerance for unpaid payroll taxes and will shut down your business to prevent you from continuing to leave your payroll taxes unpaid. It can padlock your doors, seize your assets and auction them off and tell your customers to send their invoice payments to it, instead of to you. The IRS collection office can do this quickly, too.
In addition to your business, the IRS can come after you personally. The Trust Fund Recovery Penalty can come after you personally even if your company is a corporation, and it can be up to 100 percent of what your company owes. It can also file federal criminal charges against you personally. The law is written to make it easy for them to prove that you didn’t intend to pay the taxes, too.
The IRS is watching you. They love cracking down on small businesses, because they know that there is frequently money there to collect.
If you have a payroll tax problem and are behind on payments, do not contact the IRS. If you say the wrong thing, you could be shut down. Instead, immediately hire a professional representative to talk with the IRS for you. His expertise in working with the IRS may be the only way you can keep your business, keep your personal assets and stay out of prison..
Contact us today.
Call our office for a free consultation today at: 916-660-3895