15760 Ventura Blvd, Suite 610 Encino, CA 91436
15760 Ventura Blvd, Suite 610 Encino, CA 91436
Personal, Affordable Payroll Services, Bookkeeping, and Tax Processing for Small Business throughout Los Angeles County.

Understanding Accounting Payroll Taxes

Payroll taxes are one of the least understood parts of accounting, and continue to become more complex. Some small businesses never hire employees officially, but start by gathering “helpers” and paying them in cash from the revenue proceeds. They do not necessarily understand what would happen if those helpers worked more than 40 hours in a week, or if one were injured on the job. With the type of computer resources available to the IRS, a company could get in trouble simply when one of the helpers files a tax return. Many companies turn to third party firms to help them deal with their accounting payroll taxes, and make sure they are operating legally and properly.

The Fines Associated with Non-compliance

The IRS understands that many business owners do not understand the difference between mowing the neighbor’s lawn once a week, and setting up a small business to do all the lawns in the neighborhood. The general rule is that the IRS will become interested whenever there is a certain amount of money involved. For small businesses, this level can be when revenues exceed roughly $500 annually. If an infarction is discovered, the IRS has great latitude. They can require back payment and hefty fines. Their actions can lead to the dissolution of an otherwise successful small business.

The Types of Payroll Taxes

A portion of payroll taxes ensures that employees can pay their yearly tax dues, and that they do so on a regular basis. Employers also include withholdings to cover medical benefits, IRA contributions, and other deductions. Some of these accounting payroll taxes include the following.

” Social Security Tax
” Medicare tax
” Federal, State, and Local Income Tax
” Court-ordered Withholdings

Dealing with Employees

Most employees would like a handle on their payroll and deductions. They do not want the feeling that they are being nickel-and-dimed to death. Clear explanations of the payroll taxes go a long way to helping employees understand these charges. In addition, using a third party firm for accounting payroll taxes gives extra authority to the paychecks, as the employees understand that their payroll checks are being prepared by experts. For these reasons, companies should look into contracting a firm to handle their payroll and associated taxes and deductions.