Many things can go wrong with running a business, but the one thing that a business owner wants to avoid is receiving a monetary penalty from the IRS. Since tax season is coming up, it is important to consider payroll, taxes, and IRS penalties if you are a business owner. If you want to avoid penalties from the IRS, the best thing you can do is to hand over your payroll and tax responsibilities to a local payroll company. However, if you have yet to speak to a third-party company or aren't sure if you want to, here are a few tips that will ensure you and your business can make it through the tax season with no surprises.
Maintain Solid Records
It is common for businesses to incur IRS fines due to failing to report all of their earnings or failing to be able to prove all of the deductions that they claim. In some cases, this isn't intentional; instead, it is simply due to a lack of adequate organization. However, for the IRS, it doesn't matter if the deception was intentional or not—you will be fined. Therefore, it is important to ensure you are organized by maintaining adequate records of all of your earnings and deductions.
Keep Payroll Taxes Separate
Some smaller companies will combine their primary accounts and their payroll taxes. However, it is illegal to use any money that has been collected for payroll taxes for anything but that. To ensure that you don't make a mistake here, make sure that you have a separate account for money that should be used for payroll taxes.
Don't Be Late
While this may seem a bit obvious, it is not uncommon for businesses to receive fines from the IRS each year because they failed to submit their taxes on time. If you owe taxes, you are likely to be held accountable by the IRS as an individual. If you wait too long, you may wind up being charged with the federal offense of failing to pay your taxes. Therefore, it is best to simply file on time each year to avoid the stress of the potential consequences of not doing so.
When it comes to payroll and taxes, it is best to be safe than sorry in order to protect your business. You can consult with a payroll consulting company in your area with any questions or concerns that you may have.