Outsourcing your payroll and related taxes to a payroll services company can save you, as a business owner, a great deal of worry, time, and money. Payroll services companies can not only handle everything to do with your employee’s paychecks, leave accrual, and benefits deductions, but file and pay your related taxes, both federal and state.
While the vast majority of payroll services companies are trustworthy and honorable, it is not advisable to fully relinquish your payroll services to a company without checking up on them on a regular basis. First, even the very best company could possibly make an error when filing your taxes. While many of these companies state up front that they will pay the fines in the event of an error, the burden of the fines is ultimately the responsibility of your company. Furthermore, according to the Internal Revenue Service (IRS), there have been some unfortunate instances where fraudulent payroll services companies have stolen funds from their clients. Luckily, there are a few ways in which you can protect yourself from this happening.
- Make sure that the payroll services company is filing all of your tax forms under the physical address of your business, and not their own address. This assures that any bills or correspondence regarding your taxes sent from the IRS or the state will be sent directly to you, and there will be no way for your payroll services company to hide discrepancies.
- Make sure your payroll services company uses the Electronic Federal Tax Payment System to make all of your tax deposits. This will allow you fast online access to your payment history, and the opportunity to pay any missed deposits yourself before fines occur.
- Make sure you are personally familiar with all due dates that apply to employer tax filing, and follow up to be certain your filing has been completed on time.