As a business owner, most know that they must take care of every detail in their business. From the front door to the back door, every intricate detail about the business must be handled. While it is certain that business owners stay on top of their product, equal precision must be given to the business behind-the-scene. That is, they must ensure the administration of their business, from the systems department to the payroll department. There is an accounting firm Naples, and that would like to tell business owners about the importance of handling accurately their payroll department.
Because the Internal Revenue Service is turning its attention to closing the tax gaps, focus is on researching and reviewing those businesses that have underpaid employment taxes. Businesses need to ensure they will not be one of the 6,000 employers being investigated for employment tax compliance. Here are few suggestions for businesses and their payroll department.
1. Make certain that it is clearly identified whether a worker is an employee or and independent contractor, as this distinction will make a difference in how compensation is reported to the IRS.
2. Businesses should ensure that a W-9 form is issued for withholding for each vendor in employ, lest an automatic 28% withholding be charged against them.
3. Businesses must be sure to include the fair market value of any gift cards, prizes and financial awards given to employees. It must be reported as taxable income.
4. Businesses need to also make sure that taxes are deposited on the regular basis required (monthly or semi-weekly) lest they are subject to penalties for late deposits.
For more information contact Perfect Accounting Service.