(Image: https://hrsolutions.co/wp-content/uploads/2016/12/logoaa.png) Outsourcing payroll duties can be a sound company practice, but … Know your tax duties as a company (Image: http://www.trendsettersfacilities.in/images_new/TFTS-manpower-outsourcing-company.jpg)

Many companies contract out some or all their payroll and related tax responsibilities to third-party payroll service providers. Third-party payroll provider can enhance business operations and help meet filing deadlines and deposit requirements. Some of the services they supply are: (Image: https://www.libertystaffing.ca/hubfs/Temporary-vs-Permanent-Staffing-Which-is-Right-for-Your-Company.webp)

- Administering payroll and work taxes on behalf of the employer where the employer offers the funds initially to the third-party. - Reporting, gathering and depositing employment taxes with state and federal authorities. (Image: https://i0.wp.com/www.certguidance.com/wp-content/uploads/2017/10/SD030-ITIL-Service-Level-Management-Activities-and-Scope.png?fit\u003d5502C396\u0026ssl\u003d1)

Employers who contract out some or all their payroll obligations should think about the following: (Image: https://i.pinimg.com/736x/4e/1e/6d/4e1e6d5f57423ec8a181a0ff1a7402c8.jpg)

- The company is eventually responsible for the deposit and payment of federal tax liabilities. Despite the fact that the employer might forward the tax amounts to the third-party to make the tax deposits, the employer is the accountable celebration. If the third-party stops working to make the federal tax payments, then the IRS may assess penalties and interest on the company's account. The employer is accountable for all taxes, penalties and interest due. The employer may also be held personally accountable for specific unsettled federal taxes. - If there are any problems with an account, then the IRS will send out correspondence to the employer at the address of record. The IRS strongly suggests that the company does not change their address of record to that of the payroll company as it might considerably restrict the company's capability to be notified of tax matters involving their company. - Electronic Funds Transfer (EFT) should be used to deposit all federal tax deposits. Generally, an EFT is made utilizing Electronic Federal Tax Payment System (EFTPS). Employers need to guarantee their payroll suppliers are using EFTPS, so the companies can validate that payments are being made on their behalf. Employers must sign up on the EFTPS system to get their own PIN and use this PIN to regularly validate payments. A red flag should go up the very first time a company misses a payment or makes a late payment. When an employer registers on EFTPS they will have online access to their payment history for 16 months. In addition, EFTPS allows employers to make any extra tax payments that their third-party supplier is not making on their behalf such as approximated tax payments. There have been prosecutions of people and business, who acting under the appearance of a payroll company, have actually taken funds intended for payment of employment taxes. (Image: https://hrfactory.com/wp-content/uploads/2023/01/HR-Consulting-Definition.jpg)

EFTPS is a protected, precise, and simple to use service that provides an instant confirmation for each transaction. This service is provided totally free of charge from the U.S. Department of Treasury and permits companies to make and verify federal tax payments electronically 24 hr a day, 7 days a week through the internet or by phone. For additional information, employers can register online at EFTPS.gov or call EFTPS Customer support at 800-555-4477 for a registration type or to consult with a customer support agent.

Remember, employers are ultimately responsible for the payment of withheld and of both the company and staff member parts of social security and Medicare taxes. external site

Employers who think that a bill or notification gotten is an outcome of an issue with their payroll provider should get in touch with the IRS as soon as possible by calling the number on the expense, composing to the IRS office that sent out the bill, calling 800-829-4933 or checking out a local IRS office. To find out more about IRS notifications, expenses and payment alternatives, describe Publication 594, The IRS Collection Process PDF. (Image: https://cdn.prod.website-files.com/664678c4bb2376a19eee41f5/6788e5e69322cbb4420e2200_What20a20Outsourcing20Pros20Cons20and20Is20Payroll20Service2C2C20Insights.webp)external site