Giant Payroll Issues and Steps to take to Resolve Them

Kevin Kenealy Payroll Issues Comments Off on Giant Payroll Issues and Steps to take to Resolve Them
Giant Payroll Issues and Steps to take to Resolve Them

Payroll errors are now generating a stir in the news and an uproar among employees. Acquire the knowledge necessary to safeguard your company against mistakes. Recent news stories have highlighted problems with the payroll system. Recently, difficulties with payroll have also affected businesses that provide professional services. Every year in the United States, workers at several prominent accounting firms realize that paychecks paid to them a week earlier have mysteriously vanished from their bank accounts. On average, employees at a large apparel company were underpaid by up to $200 per month. In this instance, the corporation determined that the issue was brought about due to an unsuccessful attempt to adopt a new computer system. Naturally, a significant number of employees were frustrated by the error.

These errors are significantly more expensive for workers to correct now that the cost of living has increased. It is a well-known truth that the primary responsibility of a payroll professional is to guarantee that employees are paid promptly and correctly. Payroll professionals receive extensive training on this core responsibility. It is unsettling to discover that your payments are lower than they should be, given the amount of labor you put into earning them. Half of the households in the United States have an emergency fund of less than $500, and half of the workers who are paid every month report running out of money between paydays. That implies that half of us survive off each paycheck we receive. There is simply no place for lower pay; whenever anything like this occurs, the knock-on impact on people’s lives is rapid and sometimes devastating. There is simply no room for lower income. Let’s look at the several ways in which finance teams might design an efficient payroll system.

What characteristics define an effective payroll system?

Payroll software should, first and foremost, be effective in carrying out its intended function, which is to pay employees promptly and correctly. Because of this, human resources teams need to gain insight into whether the hours that employees work are accurately tracked, whether payments are verified, and the system’s ability to recognize tax codes when contemplating a payroll system to use or reflecting on the effectiveness of an existing one. None of these methods for processing payroll are easy, and they are all significant challenges that companies must overcome. In addition, there are some answers to questions regarding problematic regions. Naturally, for the HR and finance teams to be able to find a solution to an issue, they first need to know what warning indicators to look out for.

Today’s Top Payroll Issues to Pay Heed to Or Else

Kevin Kenealy Payroll Issues Comments Off on Today’s Top Payroll Issues to Pay Heed to Or Else
Today's Top Payroll Issues to Pay Heed to Or Else by The Payroll Company 505-944-0105

Have you run into any payroll tax problems? You’re not alone. Even the most well-oiled company can make a mistake and end up in trouble with their taxes, but it doesn’t have be that way!

Here at The Payroll Company, we strive to help businesses avoid these mistakes by providing all sorts of valuable information about how they work (and what happens if I do X). We scour every corner of the internet looking for news stories related specifically towards business owners like yourself who may need advice concerning tax liability or other important topics such as employee benefits packages. In our research, we’ve come across the top challenges that business owners face today.

Payroll problems are the bane of small businesses everywhere. They can strike at any moment, and when they do you need to be prepared for anything from difficulties collecting debts owed by employees in your company (due either unpaid wages or taxes withheld), through to audits from both federal and state agencies like IRS who want their share too! 

Here we look into some common tax-related payroll issues that may arise:

Failure to Withhold and Pay Federal Taxes

US Employers are required to withhold federal income tax, and if they don’t then it can often lead them on a collision course with big trouble.

If you fail pay these taxes after withholding them from an employee’s wages or salary – which is commonplace – you will likely be held liable and incur hefty fines and penalties from the government (IRS). Remember, failing to do so could also put your job at risk!

Late Payroll Tax Deposits and Payments

The IRS will charge you fines and penalties if your payroll tax deposits are late. In most cases, they assess a 0.5% penalty for each month that the payment is excessively overdue, as well as 25% of all taxes due when it isn’t paid at all before April 15th. 

Be certain you pay on time so there are no possible hassles from Uncle Sam later.

Failure to Issue IRS Form 1099

The IRS is strict about 1099s and will act if you don’t issue them. It’s important for employers who use outside companies or subcontractors to be aware that $600 worth of income qualifies as wages. This means they need to send in a Form 1099 with payments reported on it, along with any taxes withheld during the year so far. If an employer neglects this duty, he could face steep fines of up to 31% of tax paid.

In Conclusion

Don’t wait until payroll issues become bigger problems. The more rapidly you take action, the faster we can clear up any confusion and get you back on track!

Top Typical Payroll Issues Today

Kevin Kenealy Payroll Issues Comments Off on Top Typical Payroll Issues Today
Top Typical Payroll Issues Today - 505-944-0105 GOOD JOB

Payroll taxes are applicable if you have hired employees for your business. As a business owner, you have to pay the tax deposits to IRS a day after you have paid the employees. Small businesses are also prone to mistakes and can stuck into a tax-related problems. Not paying taxes on time will charge you with heavy penalties and fines. If you delay the taxes, the amount to be paid will be more than the previous amount. There can be a lot of tax-related problems in business. There can be a problem if the business is in a financial crisis. Another cause of tax problems can be that the owners mostly delay the tax payments as they think they will pay it when they will have enough budget. Sadly, this does not happen and tax problems continue to be worse and tax penalties increase with time. In severe cases IRS threats to cease the business. Moreover, owners can be punished or sent to jail.

 According to IRS, all tax-related problems are serious but the payroll tax problem is taken very seriously. We have discussed some payroll tax issues that are commonly experienced by small business owners.

Not able to withhold and pay tax

Small business owners are required to deduct a specific amount from the salary of employees according to the income amount to pay Medicare, federal income, and social security tax. According to the requirements of the IRS, If the business owner is not able to do so, he will have to pay heavy penalties and fines in addition to paying the taxes on the income of all employees. A business owner will be considered a criminal and will be charged and can also be sent to jail if he deducts the payroll taxes from the income of employees but does not pay it to IRS.

Delayed Payments and deposits

If tax payments are delayed or are late, you will have to pay fines and penalties as per the rules and regulations of the IRS. In many cases, you have to pay 0.5 percent of the amount of tax each month. If your tax deposits are delayed, then IRS will charge you with a penalty of 25 percent. It is very important to clear your tax payments by the fifteenth of every month, the period when tax payment is deducted from the income amount of employees. This will save you from heavy fines and penalties.

Inability to Issue IRS Form 1099

Another common problem of the business owners is that they often fail to issue the IRS 1099 forms to their outside employees and contractors on time. When you pay a contractor or an outside employee, six hundred dollars or more a year, then an IRS form 1099 should be issued to this contractor or outside employee. The copies of this form should then be forwarded to IRS. Not issuing the form 1099, will cause a penalty of seventy-five dollars for every form. The business owner will also have to pay greater than thirty-one percent of the federal tax amount.

Call Now ButtonTAP TO CALL