Your business is booming, and there are a million tasks to do! It can seem impossible to keep up with payroll and tax paperwork. However, if this is you, you’re not alone! Many small business owners get overwhelmed with their day-to-day, and payroll mistakes can happen. So, which payroll mistakes should you be looking for, and how can you make it easier to avoid them? We have a few tips here that should help you stay organized.
What Are The Most Common Payroll Mistakes, and How Can You Avoid Them?
One of the most common payroll mistakes is “storing” your records in a pile on your desk waiting for tax season. Without a filing and organization system, chances are you’ll miss something important, like records of all of your taxable income or the hours and rates your team worked. Finding time to review your paperwork can be challenging, especially if it’s at the last minute. We recommend having an hour or so every week in the morning before you dig into your tasks for the day to file your paperwork correctly so you can easily find all of your tax documents. Ensuring you have easy access to your records won’t just save you time when filing your taxes, it’ll make sure you’re paying the correct taxes for your business on your net payroll.
By not planning, you could be making a serious payroll mistake! We recommend keeping a yearly digital calendar and setting automatic weekly reminders for important dates, like deadlines to submit payroll, important holidays where banks may be closed, and deadlines for filing monthly, quarterly, or yearly taxes. Not only will this ensure your team is appropriately compensated, but submitting your paperwork often will also give you good benchmarks to keep track of your cash flow.
Are all of your workers exempt or nonexempt? Or do you use contractors or freelance workers for some jobs? Another common payroll mistake we see is misclassifying your team since each kind of employee requires different types of tax payments and reimbursements. If all of your workers are classified as exempt but are paid hourly for their work, you might be missing reimbursements for time spent networking, extra expenses for equipment, or overtime payments. To avoid any tax penalties, we recommend performing an audit of your payroll and comparing them to your employee classifications. If there’s any paperwork missing, it’s essential to have your team submit those forms as soon as possible.
Trust the Professionals at the Harding Group
Unlike other accounting firms, The Harding Group, located in Annapolis, MD, will never charge you for consultations and strive for open communication with our clients.
Are you interested in business advising, tax preparation, bookkeeping and accounting, payroll services, training + support for QuickBooks, or retirement planning? We have the necessary expertise and years of proven results to help.
We gladly serve clients in Annapolis, Anne Arundel County, Baltimore, Severna Park, and Columbia. If you are ready to take the stress out of tax time, contact us online or give us a call at (410) 573-9991 for a free consultation. Follow us on Facebook, Twitter, YouTube, and LinkedIn for more tax tips.