By Steve Kania
At SurePayroll, we work with accountants all the time. We know you often advise your clients on payroll, and sometimes that can be a time-consuming and complicated process. We believe it should be easy, however people get into trouble with some basic mistakes. According to the U.S. Chamber of Commerce, one out of every three businesses pay a fine to the IRS every year.
That’s why we’d like to start this blog by talking about five common mistakes you should be able to avoid.
Let’s start at the beginning: setting up your payroll correctly. To steer clear of government penalties and fees, your clients must ensure their payroll systems comply fully with all requirements. Make sure they understand the importance of double-checking all wage calculations, getting their appropriate state and federal tax ID numbers, and properly setting up federal, state and local tax withholdings. Also check that they’re correctly entering payroll data (including data for inactive and terminated employees that will require a year-end filing); differentiating employee types (exempt vs. nonexempt; independent contractors vs. employees); and setting up deductions such as 401k and health insurance.
Seems simple, but if people are starting their first businesses, they just not know where to start. Something like the federal tax ID is often forgotten. And small errors can cost your client.
Next week we’ll look at another common payroll mistake: missing deadlines, submitting late deposits and not running payroll on time.