Outsourcing your Business Taxes
The decision to hire a payroll services provider to handle your company’s payroll brings with it many benefits. One such benefit is the relief that comes with knowing that you have a professional handling the withholding of Social Security, Medicare, and income taxes for all of your employees. As you may be aware, federal, state, and local taxes are subject to constant change, and by outsourcing your payroll, you can be confident that your company is following all current tax laws. Some payroll services companies will take responsibility for your tax filing as well.
However, it is important to know that even if you are outsourcing your tax responsibilities to a third party, you are the one who is ultimately responsible for withholding, depositing, and paying any federal taxes associated with your business in a timely manner. If the third party makes a calculation error, or fails to file forms or submit payment on time, you will be held liable. For this reason, you want to make sure that you thoroughly research your choice of payroll services provider to make sure they are company that you can trust. In addition, you should ask for periodic reports and follow up at times when you know tax payments will be due. A reputable company will not have a problem with you doing so.
One measure of double check that you can use is to make sure your name and address are on file with your business account with the Internal Revenue Service. This way, any written correspondence regarding your account and obligations will be sent directly to you. If the address of record is that of your payroll services provider, you run the risk of not being informed of critical deadlines within the tax process, which can result in costly fines.