Best Practices to Prevent Payroll Tax Penalties Avoid Missing Deadlines If employers want to prevent payroll tax penalties for late filing , they must be careful not to miss any due dates . To that end , employers should coordinate with a reputable third-party payroll provider or utilize tax management tools , such as the IRS online tax calendar , to put taxes in order and stay compliant . If there is reasonable cause to justify the late payment or it ’ s the first offense , the IRS and state tax authorities may remove the deposit penalty .
Keep Accurate , Complete and Organized Records It is important to keep accurate , complete and organized payroll records for all employees , including Form W-2s , time sheets and pay records . The IRS requires employers to keep most records for at least four years . The Small Business Administration recommends keeping payroll records for six years since some states have different requirements .
Failing to meet payroll tax obligations can happen to any business due to the variety of due dates and complexity of the process . It is important to have a payroll tax compliance system in place or to hire a reputable third party to manage your tax requirements .
We ’ ve Got You Covered At DM Payroll Solutions , we offer comprehensive tax administration services as your payroll partner . We help take on accurately calculating and depositing your payroll taxes , as well as remitting your filing timely to stay compliant with federal and state regulations . Prevent payroll tax missteps with DM Payroll Solutions in your corner . Contact us to learn more about our payroll tax administration services . ■
In addition , employers need to ensure all employee data is accurate when filing taxes , as filing with incorrect employee information can result in penalties . The items to check are :
• Employee ’ s full name
• Start or termination of employment
• Date of birth
• Address
• Tax file numbers
• Payroll details
Monitor IRS Announcements and Resources The IRS is continually publishing news and tips on tax form deadlines , so it is important to stay alert , especially before the tax filing season . If you have employees that work in different states , you need to be aware of the tax laws within those states .
Third-Party Tax Administration By working with a third-party payroll provider , like DM Payroll Solutions , you can limit your burden to just submitting your payroll . The back-office tasks of accurately calculating and depositing your payroll taxes , as well as remitting your tax filings on time , are done by the third party . Employers can take advantage of automated processing , avoiding miscalculations or late submissions .
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