INTUIT PAYROLL - MORE OPTIONS THAN EVER
Preparing your payroll records for tax purposes requires an entire year’s worth of data and preparation. If an accountant in charge of managing payroll has not adequately prepared, he or she could find themselves drowning in complicated and convoluted paperwork. With the right knowledge and focus, tax time does not need to be messy or stressful for small or large businesses.
Setting Up for Success
The most successful way to prepare for tax season is to create a system that is properly built and managed from Day One. This means that rather than preparing last year’s taxes on the first of the next year, an accountant should be preparing for next year’s taxes this year. If instead, a business accountant begins to scramble to bring together necessary figures and documents at year end, the payroll information could be lost, absent, or misconstrued. Here are 5 tips to consider for helping tax-time to pass by without a hitch:
- Get access to a client’s EIN (Employer Identification Number) as soon as possible. This number is absolutely essential, and if an accountant’s client does not have this number, neither payroll nor taxes can go forward.
- Make sure independent contractors and employees are properly categorized. An accountant can help businesses determine the difference between the two types of workers. Employees are subject to certain tax withholding and government regulations while contractors are not. This is a huge aspect of managing payroll and should be done properly from the get-go.
- Maintain an accurate record of employee compensation terms. Different businesses provide varying benefits and compensation requirements. Many benefits are tax deductible while others, such as bonuses, are subject to higher tax rates. Knowing what benefits are offered is crucial when determining how much money in taxes will be withheld.
- Automatically deposit payroll taxes at the time of collection. Clients depend on accounting companies to make paying taxes easy all year long. If tax payments are not deposited throughout the year, a business could find itself unable to pay what it owes come the tax deadline, which is disastrous.
- Check and recheck payroll reports. Before submitting anything to state or federal government agencies, make sure to have several independent checking processes. Companies hire accountants to make sure that their payroll, bookkeeping, and other financial aspects of their business are squared away and legal. Although the responsibility of the upholding tax laws are ultimately placed on the business owner, it is the job of accountants to properly educate their clients about the complexities of the tax code.
There are many times when clients come to business accountants at the beginning of the year completely unprepared to deal with payroll processing. This is difficult for an accountant, but it is a situation that must be conquered all the same. Accountants should work with their customers very closely to make sure everything is squared away before documents are signed. This may mean that the client needs to have their employees sign paperwork or opt into company benefit programs. If a patron cannot provide all the proper documentation, it is best to figure this out as soon as possible so that the accountant can request a filing extension the proper forms to the government.
Preparing Accountants for the Busy Season
Being prepared for the busy season often means that employees need to have leaves of absence approved months in advance. Also, accounting firm employees may need to be informed upon hire that they will be expected to work extended hours during the first four months of the year.
Keeping Stress at a Minimum
Accountants should plan to de-stress after each day’s work. A little mental relaxation or physical exercise after dealing with numbers and formulas can go a long way toward refreshing an employee for another day of work. With some preparation, any business accounting firm can make the most of tax season.
For over 12 years, Maya Konviser has been providing accounting, payroll and business management to Los Angeles business owners including clients across a broad spectrum of industries from entertainment to retail to contracting. As President of ATPP, her experience, leadership and guidance has propelled ATPP to be among the premier Los Angeles-based Accounting and Payroll Services.