Common Payroll Errors to Avoid at Tax Time
A year of owning your own business has flown by. Now instead of kicking back and enjoying a deserved vacation, you’re stuck with gathering payroll documents in a scramble to meet deadlines. To add to the stress, as Nicole Fallon points out in her article on Business News Daily, “mistakes on your payroll, whether intentional or not, can really cost your business.”
Here are the most common errors to avoid on Fallon’s list:
- Improperly handling taxable gifts and rewards.
Some items can wait till the end of the year, but items like employee rewards and gifts need to be reported around the time they were received.
- Not researching legislative changes.
Taxes are constantly changing, with new rates and forms appearing all year.
Tip: utilize cloud and web-based payroll services which are both automatically updated.
- Missing ACA-related regulations.
Health insurance reporting has become more complex with the Affordable Care Act, and new requirements have arisen.
- Incorrect employee classifications and calculations.
Are your contractors actually employees or vice versa?
Are your out-of-state employees set up in their current state?
These errors carry stiff penalties, so if you have opted not to outsource your payroll, be sure that you are keeping excellent records throughout the year and staying on top of all the deadlines and requirements.
As soon as you can afford it, get outside help from a trustworthy payroll processing company.
If this filing season has been a headache, this is the time to make it easier next time around. “As you take your business into the new year, be sure to maintain good habits and keep up your records and files right from the start,” Fallon concludes.
To view the original article in its entirety, please visit Business News Daily.