Keeping Track of Federal Identification

Making sure your small business has an employer identification number is important. Having an EIN makes it so the IRS can identify your business. A nice thing about an EIN is that applying is free!

You also need to check with the state and local government for your local tax ID number. The IRS offers instructions on how to classify employees to help owners steer clear of penalties for improper misclassification.

Collect and Keep Employee Tax Information

When you hire new employees, you need to make sure you have them fill out tax forms so you can collect important tax information for them. Forms like W-4 and I-9 discuss legal information on their work status and how your employees would like their taxes taken out.

Choose What Schedule You Want Payroll To Follow

You need to choose how you want your payroll to roll out. Do you want it to be weekly, biweekly, semiweekly, or monthly? Choosing this schedule also affects yearly schedules and it is important to keep in mind that some states require hourly workers to be paid weekly.

Regular employees must be paid in compliance with federal and state laws. For Colorado employers, workers must be paid on an established schedule and receive wages that meet or exceed minimum standards. For processing, pay periods can be no longer than 30 days in duration; and paychecks must be issued within 10 days of the pay period’s end unless other arrangements have been agreed upon between the employer and employee.

Figure Out What Gross Pay Should Be

Doing the math for gross pay will help you figure out what you want your wages to be. Calculating the gross wages you are willing to pay your employees should be done so you can figure out your budget with how many employees you can afford to employ.

Deductions and Allowances

Processing each employee’s deductions and allowances is important so you can keep track of what needs to be paid for taxes. Some potential deductions for payroll could be

• Federal Taxes
• Social Security
• State Taxes
• Local Taxes
• Medicare
• 401 (K) contributions
• Workers Compensation
• Benefits

As an employer, you are required to withhold Social Security payments, Medicaid/ Medicare payments, and then federal, state, and local taxes – generally in that order – from every employee’s paycheck. Colorado and the federal government share the same deposit requirements for unemployment insurance. Quarterly filings are required by the 15th of these dates to avoid penalties.

Calculate Net Pay

A smart step to learn what your employees take home money will be is to calculate their net pay. This is their:

gross pay – deductions = net pay

Once this is calculated you’ll be able to pay your employees with their chosen method of payment. Whether it is by check, direct deposit, or another method.

Healthcare Service Obligation

The Patient Protection and Affordable Care Act of 2010 has become a reality for small business owners. Although established organizations have had time to prepare for these changes, newer business owners may wonder whether they are exempt or expected to comply with mandates on employee benefits. For employers offering health benefits to employees, the federal government has provided tax credits and relief for some eligible small business owners.

Small Details Can Mean Big Trouble: Aspects of Small Business Payroll Services That Could Cost You Big Time If You Get Them Wrong

In Colorado, you need to be aware of local labor laws that directly relate to your small business’ payroll. Not understanding the details of the laws and regulations in place can have HUGE consequences and costs for your small business. Below are a few examples of laws and regulations that affect your payroll:

Categorizing Your Workforce through Worker Classification

Whether you have a W-2 employee or are hiring independent contractors to complete specified services, their classification impacts how you run payroll and what you need to withhold. The IRS and the state of Colorado have specific conditions that classify certain employees as regular or contracted. Contracted workers can be paid on a pre-determined schedule for invoiced work without mandatory withholdings or certain types of workers’ compensation coverage.

As well, it is important to understand what qualifies a worker as an independent contractor or W-2 employee. This is where a local, Fort Collins CPA who provides payroll services can benefit your small business: they should know the local, state, and federal laws.

Mandatory Withholdings

Every employee must make mandatory payments to Medicaid/Medicare and Social Security, followed by federal, state, and local taxes that are withheld from paychecks. Federal tax withholdings will be determined by the employee’s specific withholdings reported on their W-4 completed upon employment. As an employer, you must deduct these entitlement payments and make quarterly deposits to state and federal agencies. Quarterly 941 forms are a mandatory reporting aspect for all employers.

Mandatory withholdings are not required for payments made to independent contractors. The employer must simply file an annual 1099 form stating the amount of money paid for these services. In this instance, the contractor is responsible for paying all applicable taxes without the required employer contributions to Social Security and Medicare. Knowing the classification of all hired labor is extremely important, as improper classification can lead to tax debt and other penalties.

Timely Compensation

Compensation for regular employment must be determined upon employment. In Colorado, payment for employment must be processed within 30 days of the period of services. Regular employees must affirm their employment eligibility and be of appropriate age for the hours required for the job. As an employer, you must also adhere to state and federal minimum wage requirements.

Professional Payroll Checks: Itemized and On-time

Beyond ensuring compliance with employer requirements, you need a payroll company that can promise timely processing with professional checks. Your payroll checks will also include itemized withholding statements to help you and your employees properly report and track their entitlement and tax payments. Other paycheck deductions can include 401k or pension plans, as well as health care plan payments.

These payments are generally pre-tax to help limit your employees, and the business’s, tax liability from compensation. Other payroll considerations can include employee bonuses or commission payments that can vary from paycheck to paycheck.

Pay Payroll Taxes while Keeping Your Documents Safe

Paying payroll taxes is a must. That is why you need to originally calculate what taxes will be taken out of your employee’s checks. These tasks will help your business run smoothly.

Doing Your Small Business Payroll Service at Home? Here is some help!

Some key information in helping your payroll services run smoothly while doing it yourself is making sure to check your work. You want to always confirm the correct employee is receiving the correct amount in each paycheck.

The best way to keep your payroll service safe is to back up your data and make sure to have the correct storage device for your payroll. With the files and tax identification referenced above, it is important to make sure your data is saved securely in the chance an accident happens to occur to your software,

Outsourcing Payroll to Help Your Small Business

The tips above can seem like a lot. Handling payroll on top of your core business can prove to be too time-consuming to benefit your bottom line. While tax requirements and labor laws are changing so often outsourcing for your payroll will help lessen the burden of doing your small business payroll yourself.

Outsourcing your payroll can increase your profits and bring you peace of mind.

Do you worry about the potential mistakes you might make while doing your payroll at 8 PM when you could be doing something else? Reduce your risk of mistakes and hire a CPA to do your payroll. You have enough on your plate – let someone else handle time-keeping, compliance, and ever-changing State and Federal regulations. Don’t worry a CPA will keep track of all the tax rate changes and different rules from various agencies, including the updates on minimum wage and employment requirements.

Payroll Services Near You To HELP

At Steven J. Wick & Associates, P. C. we have the CPA expertise to keep your payroll current and in compliance with all taxing authorities and laws. As a small business, it is important to know your employees are being cared for. Hiring a CPA to take care of your payroll services helps you as a small business owner focuses on your day-to-day tasks in Fort Collins.

Our comprehensive Fort Collins payroll services can make sure that there are no costly errors or omissions that could end up causing a big headache down the road for your small business.

We will also keep you in compliance through timely planning and filing of payroll tax forms. These payroll services are what your small business needs to grow in Fort Collins.

Payroll services in Fort Collins for your small business.

Our Experienced Team is Happy to Assist With:

Regular payroll processing, including reporting to all applicable taxing authorities

Professional computer-generated checks for all of your employees

‘After-the-fact’ payroll processing, including tax reporting and compliance assurance

Preparation of quarterly 941’s, state/federal unemployment reports, federal and state deposits, W-2s, and more

Accurate reports that help you better understand your payroll

Access to our team of CPAs and tax experts to help answer any of your questions

With these tasks our team can help you with there is no reason to have your small business feel burdened by your payroll services. Outsource your payroll and get stress-free.

Beyond Bookkeeping

Every small business has bookkeeping needs, but maintaining payroll and tax compliance is just the beginning of what Steven J. Wick and Associates can do for you. Their accounting services go beyond bookkeeping to provide financial services and advising to help your business succeed in a highly competitive environment.

Their experienced CPAs can help you determine areas of your business that may require more spending and areas where you can save money. Your accounting professional can guide you through the figures, providing detailed reports and summaries, to show you how to make your money work for you.

CPAs Helping Small Businesses with Payroll Services

Don’t spend another moment agonizing over payroll processing! We are here to help! Contact us at Steven J. Wick & Associates and we’ll take the pain out of tax planning and payroll processing with our comprehensive and accurate Fort Collins payroll services.

Do you need Small Business Accounting Fort Collins, services designed to help local businesses thrive in tough times? Reach out to Steven J. Wick & Associates P.C. to help get your payroll services in order.