Regardless on the kind or size of business you have, payroll can be one of the things that would make you to commit mistake. It requires a high regulation that covers everything from personal information of the employee up to the legal requirements to comply for the government. Do it right or else you will face terrifying consequences.
Tax agencies always take seriously the process of withholding money out of the paycheck of the employees. In order to handle this matter in a proper, effective, and efficient way, there are three things to do:
- Implementation of the best payroll accounting software in accordance to the type of business you have
- Getting a set payroll processing sequence
- Understanding all payroll tax rules and regulations well
An associate licensed tax professional named Daniel Petri, working at the Tax Defense Network provides 4 key factors to consider avoiding troubles.
- Don’t try to handle payroll by yourself. Many small business owners are neither knowledgeable to payroll nor they have enough time needed to handle payroll.
- Maintain an accurate and updated profit and loss statement to give you a good idea of the monthly profit of the business.
- Always have another business bank account that is only intended for the company’s payroll. By doing this you can separate the general business funds from the money that is appropriated and intended for the payroll and its taxes.
- Every time your business issues payroll to employees, it is advisable to make a federal tax deposit for payroll taxes. Through this way, you can ensure that the money will go toward the payroll taxes properly.
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