Avoiding Tax Law Penalties
We always here the same question:
“Can not knowing a tax law really affect my business? I can’t be fined for following an old law, as long as I am trying to be compliant, right?”
The answer is NO!
Everyone has good intentions and keeping up with the tax laws in your area is time consuming as an owner or even for your accounting department, if you have one. And we all feel we are safe if we are outsourcing our payroll, but how safe are we really?
Even If you are paying your employees on time and no one is having an issue, don’t assume your payroll is error free. According to the Internal Revenue Service (IRS), about 33 percent of employers make payroll mistakes which cost thousands in penalties for the company each year. We congratulate you on having happy employees, but imagine what would happen if one of them found a mistake on their paycheck…that you had been making for the past 12-months.
Payroll taxes have never been easy and today there is no exception. With multi-state taxation, anti-wage theft laws, accidental over-payments, we are only touching lightly on a few of the problem areas; these areas are also different in each state! On top of making a correction, each state also has a different mandates on limits for how far back a mistake can be corrected and still be allowed a correction.
Researching, understanding and applying these laws can be extremely time consuming.
You may assume that your payroll provider is up-to-date on all these laws, but if they make a mistake, who pays for the mistake?
We encourage you to ask the hard questions.
Ask your payroll provider to know and understand how issues and mistakes will be addressed BEFORE they happen.
A quick phone call to make sure they are remaining diligent about your payroll is important and may be faster than dealing with a large penalty that they don’t cover.
For a payroll audit or for more information regarding tax laws, please call Malcolm or Scott today at 800-451-1136.