Banish Payroll Headaches With Outsourcing Options

SMB leaders need to spend more time on business-critical activities and less on admin tasks. Payroll services solutions can help.

- 

In the pantheon of responsibilities that sap small and midsize (SMB) business owners’ time and energy and distract them from the core objective of growing their business, payroll administration looms large. Almost a quarter of SMB owners spend six hours or more a month on payroll administration, and IRS statistics show that 40 percent incur penalties averaging about $850 every year. For the businesses themselves, even minor missteps in this area can have major consequences.

Payroll is a “hot-button” issue for the IRS and state taxing agencies, says Joshua Meller, senior tax advisor at 1-800Accountant, which provides tax compliance and accounting services to about 200,000 SMBs nationwide. “Small businesses are the most likely target of increased tax-compliance enforcement because they are the largest source of uncollected taxes, and payroll taxes is one of the areas under the closest scrutiny.”

While some tax obligations come with safety valves, such as the option of filing for an extension on income tax returns, there is no leeway with payroll taxes. If you submit your forms late, the meter on interest and penalties starts running immediately. “It can add up quickly,” Meller warns. In fact, late filing can result in a triple whammy of penalties—for failure to file, failure to deposit, and failure to pay. They can add up to an additional 30 percent or more of your tax liability, and both federal and state filings are subject to them.

REFOCUS ON YOUR BUSINESS