Small business payroll processing isn’t a minor deal. Making even small mistakes can result in huge fines and penalties. This is one of the primary reasons so many business owners are turning to third party online accounting services to handle the fine details of their bookkeeping and payroll. If you’ve delegated the responsibility to a bookkeeping firm, there are some things you won’t have to worry about. On the other hand, if you’re going it alone, here are a few tips to help you avoid those aforementioned penalties and fines.
- Classify your employees accurately. This is important to the withholding of taxes and unemployment payments that you’re required to make as an employer. The different employee classifications are: employee, independent contractor, statutory employee, and statutory nonemployee.
- Pay attention to taxes for family members in your employ. If you’ve got members of your direct family working for you, they may not be subject to all the same taxes that a regular employee would be.
- Complete all necessary hiring forms. Not only is there the requirement for new employees to fill out a W4 form, but there are also other forms you may not be aware of – such as the I-9 form which is verification that the employee in question is eligible to work within the United States.
- Remain in accordance with Fair Labor Standards. Fair Labor Standards determine the national minimum wage, but state laws can trump federal laws – therefore it’s critical to have a good understanding of how both federal and state labor laws operate.
Failing to follow the letter of the law when doing your small business payroll processing can lead to some rather uncomfortable circumstances, like having to fork over hefty fines to the tax man. If you want to avoid this eventuality and would much rather focus on running your business than having to fret over payroll, consider looking into outsourced online accounting services as a solution. Visit AccountingDepartment.com to start your inquiry today.