Recent Posts:Preparing to Outsource Your Small Business PayrollSmall business owners have enough on their plate – too much to be concerned about every new tax code and regulation. However, there are several new IRS mandates that will affect your small business in 2016. If your managerial schedule is keeping you from mingling with your customers, you might want to consider outsourcing your employee payroll processing. Padgett Payroll Services® wants to help keep you compliant and on the path towards profitability. If you are looking to have a payroll service company handle your employee payroll, direct deposits and optional deductions, you have some homework to do. Before any experienced payroll manager can take over the reins for you, there are some tasks you will need to complete and continue to maintain. Does Your Small Business Have (or Need) an EIN? All small businesses that operate as either a LLC or S-Corporation-S, also known as a partnership, are required to have an EIN, or Employer ID number. When paying wages to contracted or classified employees, an EIN helps streamline the process for filing federal payroll taxes. EINs are printed on all W-2s and MISC-1099 forms and provide information necessary for employees’ personal tax filings. Padgett uses payroll programs that will auto-populate these year-end forms for your employees. How Long Do Small Businesses Need to Keep Employee Records? Employee records contain everything from date of hire, classification of employee type, ending hire date, company, and employee contributions for taxes, optional deductions and direct deposit information. The general rule of thumb says to keep employee-specific and business tax records for three years after the tax return was due and/or filed. If you or the employee owed taxes, you will want to keep these records for an additional two years after the final payment was made. What Types of Tax Records Can a Payroll Services Company Help Maintain? Padgett will help you maintain employment tax records for federal payroll taxes. We can also continue any and all optional payroll deductions, as well as process paychecks through direct deposit. In case you are not familiar with federal payroll taxes and optional deductions, here are some common types of mandatory payroll taxes:
Optional deductions employees may take include:
As a business, you are also required to keep the following for every employee for the duration of the time frames mentioned above:
Aren’t All Employees the Same? No. As a small business, you have the luxury to have contracted employees and in-house workers that employed directly and within your business. When you hire employees on a contractor-basis, they are responsible for withholding their own taxes towards federal and state requirements, but you will still need to show the IRS that they worked for you. You will need to let your Padgett payroll manager know, so they can make sure the right paperwork gets processed for IRS and tax filing purposes. We understand that payroll taxes are overwhelming. There are so many tax mandates and payroll processing programs that just add more confusion to your already busy work schedule. Outsource and free up your plate to be more efficient in other areas of small business operations and leadership. The benefits of outsourcing your payroll management allow you to focus on your customers, create a healthy work environment, and have better work-family balance. Padgett offers payroll administrative services for small businesses all throughout the U.S. and Canada. We have offices in many major cities including Boston, Chicago, Denver, Houston, and Los Angeles. Focus on what matters most. Get a free quote on our outsourced payroll management services today! 02/19/2016
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