No one looks forward to tax season. The fear of being audited alone looms large as you submit the paperwork you went over dozens of times. If you own a small business, this fear might be even more pressing; after all, audits are expensive, time-consuming and emotionally draining.
Your concerns are rational. Inconsistencies with payroll tax are the most common causes of state or federal audits (along with income tax, sales tax, unemployment claims, workers’ compensation, and other industry-specific issues). Fortunately, that feeling of terror over audits and other costly tax errors can be a thing of the past by doing your payroll tax online.
Takes care of the complexities
As an employer, the biggest and most time-consuming task in regards to tax season can come from researching your state’s tax laws, codes and regulations. On top of that, you are in charge of ensuring all employee information is up to date and error-free.
If you are like 22% of other business owners, you do not even know your business’s tax rate. This can be trouble when tax season comes around and you find out you have a large amount of debt to shoulder.
By doing your payroll tax online, however, you can solve many of these common issues with just a click of a button. By choosing a cloud-based software, your employees could also update their information the moment it happens.
Not only would this clear up hours and hours for you throughout the year, but it would also minimize the risk of being audited or fined.
Minimizes chances of human error
The chances of you or your human resource professionals making a small but costly mistake on the payroll is extremely high no matter how careful you are. Payroll tax online, however, can operate as long as you need, whenever you need, and can be automated.
Busy employees tend to have trouble keeping track of too many important documents at a time, no matter how organized they may be. When it comes to payroll, it is easy to misplace timecards or other vital tidbits of information, which, in the end, could be the breaking point of a federal or state audit.
Payroll software is also much better at catching mistakes quickly than the average person. Reviewing your payroll tax two, three, or six times can be a thing of the past. Additionally, doing payroll tax online can keep you from missing deadlines; approximately 25% of small businesses faced a penalty for failure to file in 2019.
By staying organized and minimizing errors by doing your payroll tax online, the chance of you being audited reduces significantly. You could also use a w2 generator when someone needs a hard copy of their salary details.
There are dozens of options available for doing payroll online. Each software comes with unique features that have the potential to boost your company morale, offer a user-friendly interface and keep your audit risk low.
Ultimately, the program you choose will depend on several key factors: the size of your payroll, the size and role of your HR and payroll departments and the taxes and fees you have to keep up with. In any case, it is best to find a program that offers 24/7 customer support.