Whether a business does their payroll in-house or outsources their payroll to a third party company, the IRS holds the individual employers responsible for filing and paying their payroll taxes correctly and on time. The trend with payroll companies is to impound the payroll tax liability with each payroll. At first glance, this could seem like a good thing, as the business owner doesn't have to worry about overspending their account using their payroll tax liability. But what happens when you get a letter from the IRS saying you owe taxes that your payroll company already took out of your account? Sadly, we have met many business owners who have had to pay their tax liability TWICE because their payroll company was not paying the tax liability.

Payroll Cents is secured by TransPAYrency, protecting you from the scenario above. With TransPAYrency, businesses can track, with clarity, where payroll transactions are going, simply using online banking or looking at bank statements. If you get an IRS letter telling you that you owe payroll taxes, you can verify that the amount has cleared your account, and Payroll Cents will verify that the IRS credited the money to the correct tax account... saving time, money, and stress... 

There are many advantages to owning a business. One of them is the tax advantages to hiring family members when the business is structured as a sole proprietor or partnership.

When employing a child under the age of 21, the wages are exempt from FUTA tax. Furthermore, if the child is under the age of 18, wages are exempt from Social Security and Medicare (FICA) taxes. If the parent is employed by the child, the wages are exempt from FUTA taxes. Every state is different, but in Tennessee, the SUTA taxes are exempt in all three scenarios.

Every situation is unique so if you have further questions, feel free to give Payroll Cents a call at (865) 607-1658

Most people don't think about check security until they are a victim of check fraud. Business owners are not excluded from this type of theft. There are several ways for thieves to change the dollar amount on a regular business check with today’s sophisticated scanners, copiers, and printers that makes reproducing checks easy.

Since Payroll Cents writes more checks than most companies, only check paper with several security features are used. Another secure way to pay your employees is to have direct deposit.

If you are concerned about the security of your checks, call or email Payroll Cents to find out more about your secure options.

The IRS requires all businesses that hire workers to report wages paid. Form 1099 is used for workers who are classified as independent contractors and Form W-2 is for employees.

A worker classified as an independent contractor is not subject to payroll tax withholding, but the IRS requires such a worker to meet certain standards to be legally classified as an independent contractor. The IRS will presume that a worker is an employee unless such evidence is available.

There are two situations in which an independent contractor can receive both Forms 1099 and W-2. The first is if the worker performed duties as an employee and independent contractor concurrently for the same employer. Basically this means the worker had a job as an employee and another job as a contractor for the same company. The other situation is where the worker held these two jobs at separate times during the same tax year for the same employer.

Filing both a 1099 and W-2 for the same worker will likely cause the IRS to suspect wrong classification of workers as independent contractors. If the IRS rules that a worker was wrongly classified as an independent contractor, there are significant tax penalties imposed on both the employer and employee. A way to avoid such a consequence is for either the employer or employee to file Form SS-8 in advance with the IRS, which will result in the IRS officially determining the proper worker classification.

If you need help preparing your payroll for your workers, Payroll Cents is here to help. Payroll Cents will make sure your independent contractors get paid consistently and your employees' payroll taxes get filed correctly. Also, Payroll Cents can help you convert independent contractors into employees (hopefully before the IRS tells you to).

You must get a W-2 to every employee by Friday January 31st. You will also need to file this form with various government agencies by certain deadlines that are determined by your filing method (electronic or paper).

A common mistake is mismatching names and Social Security numbers. This results in earnings not being properly credited to employees and problems with Social Security payments. Mismatching is so common that the Social Security Administration runs a toll-free Employee Verification Service at 1-800-772-6270.

Other problems are easier to avoid. Do not write dollar signs in the boxes. Government optical scanners often read them as eights. Using a font that is too large or too light is a common mistake. Stick with 12-point Courier. Also, one IRS Section Chief suggests placing the numbers in the middle of the boxes.

If you need help. Payroll Cent$ will prepare and file your W-2's for you. Email or Call us today for more information.