1 Outsourcing Payroll Duties

budoce00132529 edited this page 2025-03-19 06:34:20 +08:00

Outsourcing payroll tasks can be a sound company practice, but ... Know your tax duties as an employer

Many companies contract out some or all their payroll and associated tax tasks to third-party payroll service suppliers. Third-party payroll provider can enhance business operations and assist satisfy filing due dates and deposit requirements. A few of the services they provide are:

- Administering payroll and work taxes on behalf of the employer where the company supplies the funds at first to the third-party.

• Reporting, collecting and transferring employment taxes with state and federal authorities.
  
  Employers who contract out some or all their payroll responsibilities should think about the following:
  
  - The company is ultimately responsible for the deposit and payment of liabilities. Despite the fact that the company may forward the tax amounts to the third-party to make the tax deposits, the company is the responsible party. If the third-party fails to make the federal tax payments, then the IRS might examine penalties and interest on the company's account. The employer is liable for all taxes, penalties and interest due. The employer may also be held personally accountable for specific unpaid federal taxes.
• If there are any issues with an account, then the IRS will send correspondence to the company at the address of record. The IRS strongly recommends that the company does not change their address of record to that of the payroll service supplier as it might considerably restrict the company's ability to be informed of tax matters including their business.
• Electronic Funds Transfer (EFT) must be used to deposit all federal tax deposits. Generally, an EFT is used Electronic Federal Tax Payment System (EFTPS). Employers must ensure their payroll service providers are utilizing EFTPS, so the employers can confirm that payments are being made on their behalf. Employers ought to sign up on the EFTPS system to get their own PIN and utilize this PIN to periodically confirm payments. A red flag must increase the very first time a provider misses a payment or makes a late payment. When a company signs up on EFTPS they will have online access to their payment history for 16 months. In addition, EFTPS permits employers to make any additional tax payments that their third-party service provider is not making on their behalf such as estimated tax payments. There have been prosecutions of individuals and business, who acting under the look of a payroll company, have stolen funds intended for payment of work taxes.
  
  EFTPS is a protected, accurate, and simple to use service that supplies an immediate verification for each transaction. This service is offered totally free of charge from the U.S. Department of Treasury and allows employers to make and validate federal tax payments digitally 24 hr a day, 7 days a week through the web or by phone. To learn more, companies can enroll online at EFTPS.gov or call EFTPS Customer Service at 800-555-4477 for an enrollment type or to speak with a client service representative.
  
  Remember, companies are ultimately accountable for the payment of income tax kept and of both the employer and staff member parts of social security and Medicare taxes.
  
  Employers who believe that a bill or notification gotten is a result of a problem with their payroll company need to get in touch with the IRS as quickly as possible by calling the number on the costs, composing to the IRS workplace that sent the expense, calling 800-829-4933 or going to a regional IRS office. For additional information about IRS notifications, bills and payment choices, refer to Publication 594, The IRS Collection Process PDF.