If After Reading this article you need help set up your Payroll, Give us a Call at 310-412-1040 we Run Payroll Thru Paycheck System. Six Common Payroll Mistakes to Avoid Getting payroll done has gotten so much easier than it used to be for small business owners. But there are still some minefields when it comes to state and federal compliance. Well take a look at six of them in todays article. 1. Business or Personal? A great admin might want to help you in any way they can, including personal errands. But time spent having your admin fetch your dry cleaning and drug store prescriptions is not deductible as a business expense, even if it makes you more productive at work. Be sure you separate your business payroll from personal payroll to avoid tangling with the IRS on this issue. 2. New Hire Report Its not every day that a small business needs to hire additional help, and the New Hire Report is easy to overlook. Its due to your state within a certain number of days of your new employees hire date. Some payroll companies will file it for you, and some wont, so its best to check so that you dont make the common mistake of forgetting to file this report. 3. Workers Compensation When you have employees, you need workers compensation. When you bring on your first employee, youll need to overcome this learning curve of figuring out what you need. Even if youre a veteran employer, you may have coverage holes in your workers compensation coverage. Do you have employees who work at home? Are you sure they are covered? In some states, employees have to be specifically named in the policy before they are covered to work at home. Be sure you ask the right questions so theres not a risky gap in this essential protection for employers. 4. Posters There are both state and federal notices that must be posted for employees to be able to read. California is especially zealous and liberal about issuing fines (up to $17,000 per location) for employers that do not have their posters, well, posted on workplace walls. 5. Employee versus Contractor The proper classification of a worker as a W-2 employee or a 1099 contractor has long been an area of scrutiny for the IRS. The IRS has rules as well as court cases that have established the guidelines that exist in this area. If you classify a worker incorrectly as a contractor when they should be an employee, then you can be held liable for paying employment taxes on that contractor. 6. Bonuses Bonuses can often be a spur of the moment thing or something thats done at the very end of the year when were occupied with the busy holiday bustle. It can be easy to forget that the bonuses need to be run through payroll like all other wages so that the proper deductions and taxes can be calculated. Use these six items as a checklist to avoid these common mistakes as well as reduce your business risk in the payroll compliance area.
Posted on: Tue, 12 Aug 2014 05:00:32 +0000
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