IRS Payroll Reporting…How to Save Unnecessary Fines & Penalties
Payroll Reporting Guidelines to the IRS
Payroll is the largest and most burdensome administrative responsibility for a business owner. Whether you have one employee or a thousand, both the IRS and your state has a myriad of payroll reports and deadlines for which you are required to complete. Unfortunately there is not a one stop shop to pay and report all of the varying deadlines and taxes. However, there is a solution which makes the reporting of payroll dramatically more seamless than if you strive to go it on your own.
The easy part of preparing a payroll is the actual paycheck itself, but that is where the simplicity stops and the difficulty begins as there are a dramatic list of reports and varying deadlines to meet. To this end I have recapped below some of the reports and their significance.
Form 941 to the IRS: A quarterly report for payroll to report wages, federal withholding and FICA/Medicaid. These reports are due thirty days after the close of a quarter.
Form 940 to the IRS: A annual report for FUTA/Federal Unemployment. These taxes are paid based upon the first $7000 of an employees salary and is assessed at a rate of .007 up to a maximum of $56 per employee/per year.
Please note you should file all of the reports by their due date ( I suggest filing as soon as you receive especially if you know you will have no payroll ) as both the IRS and your state will assess a penalty for late filing. If you have no payroll you will still need to file these reports marking the reports zero in the amounts being sure to keep a file for your records.
Due to the complexity of payroll reports and payments I suggest that all business owners, regardless of the number of employees, that you retain a payroll service to prepare and maintain your paychecks, payroll reports, and to ensure continued compliance with local state and other ordinances relative to your payroll requirements. In this way you will aptly delegate one of the more cumbersome aspects of your business to someone who handles payroll each and every day.
Navigating through this administrative nightmare is a critical hurdle that all business owners must overcome. By calling us today we can assist in making you aware of the myriad of the tax laws affecting your payroll responsibilities as well as to refer qualified payroll companies to assist in this important step in your long term success.
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