4 Payroll Tips for Small Business Owners
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Payroll for Small Business Owners can be a Hassle.
Owning and running a small business is often time-consuming and stressful. Handling payroll is more complex than it seems, and may feel like a daunting and complicated process. Here are a few tips for managing your payroll correctly, efficiently, and in compliance with tax laws.
Tip # 1: Know Your Federal Employer Identification Number (FEIN)
Your Federal Employer Identification Number is issued by the IRS and, if you use a payroll processing company like Alron Payroll, Inc., it must be supplied for processing employee wages.
Tip # 2: Properly Classify Your Employees
It’s imperative that you properly classify your workers when determining if they are employees or independent contractors. Did you know that in Florida if an independent contractor makes at least 80% of his or her income from your business the state will automatically classify them as an employee during a payroll audit? If you haven’t been paying the proper payroll taxes you could be looking at a major headache.
Tip # 3: Corporate Officers Need Paychecks Too
According to the IRS, corporate officers are automatically employees of the company and must receive a “fair and reasonable salary” for services rendered. In a Sub S Corporation structure, a shareholder who is also an employee runs the risk of having their distributions reclassified as wages, with payroll taxes and penalties imposed, if they don’t take a proper salary.
Tip # 4: Withhold and Pay State and Federal Taxes
It is vitally important that your company withholds each employee’s share of federal and state income taxes from payroll. You will need to calculate taxes and send payments to the appropriate government agency. In addition, you must submit payroll tax reports on a consistent basis to the IRS. Not keeping up to date with taxes can become very costly, very quickly.
Contact Brevard County’s Payroll Specialist!
Payroll can be complex, but it doesn’t have to cause stress. Alron Payroll, Inc., a subsidiary of Alron Enterprises, Inc., specializes in providing small businesses the highest quality expert assistance with payroll processing and tax remittance. If you’re looking for professional assistance, Alron Enterprises, Inc. has your back. It’s our goal to provide you with an effortless payroll experience so that you can focus on running your business. Contact your Payroll Specialist today!