Pauline Ho, head accountant at Laus Consulting in Orlando, FL, explains the most common payroll-related errors that cost small businesses money. For more information please visit http://lausconsult.com
In a recent interview, Pauline Ho, head accountant at Laus Consulting in Orlando, FL, revealed 4 payroll mistakes that cost small businesses money.
For more information please visit http://lausconsult.com
When asked to comment, Ho said, “Navigating the complexities of the payroll tax landscape can be burdensome for small business owners. Not getting it right the first time can lead to huge costs and hurt your bottom line. Here are the top 4 mistakes to be on the lookout for.”
One of the most common payroll-related errors, according to Ho, is misclassifying employees.
When asked to elaborate, she said, “Many small business owners are unaware of the difference between an employee and an independent contractor, the latter of which has become increasingly popular in recent years.”
“However, both categories have distinct tax implications, and misclassifications are likely to land you into trouble with the IRS,” Ho commented.
Another way that small business owners might be unintentionally crossing the IRS is by not knowing deadlines for payroll tax.
“Every business owner is required to report and deposit payroll taxes at both the state and federal levels by a certain date. Failure to do so could result in hefty fines and penalties, which could be particularly devastating to the bottom line of small businesses,” she said.
Ho added that hiring a professional accounting service is a great way to ensure that small business owners stay on top of their payroll tax deadlines.
But even when small business owners adhere to payroll filing dates, Ho said, many make errors will completing the forms.
According to Ho, “There are tons of required forms involved in payroll tax, which could be overwhelming to many. But it’s important that these forms are filled out as accurately as possible; even the smallest of errors could derail filing payroll taxes.”
“Many of the mistakes stem from inaccurate employee information, such as the correct spelling of the employee’s name, current address, social security number, start/termination date, and birth date. One great way to avoid this type of mistake is through comparing information with the W-2 form filled out by your employee,” she said.
One trap that business owners often fall into is poor-record keeping and data entry.
“Poor record keeping could be the downfall of your business. It’s happened before, and it’ll happen again. Make sure that you’re keeping records of timesheets, canceled checks, tax forms, and proof of past payments.”
Ho added that paying for payroll services could save small business owners money in the long term.
“Outsourcing payroll services to a trusted accountant is a great way for business owners to focus on growing the company. Plus, having someone else who is qualified in providing payroll solutions eliminates costly payroll mistakes for many small businesses.”
Name: Pauline Ho
Organization: Laus Consulting Services LLC
Address: 879 Outer Rd B, Orlando, FL 32814, USA
Release ID: 507620