Payroll Tax Reporting

Ok, so if there is one thing that I would recommend when talking about payroll it would be to OUTSOURCE it. It is just a total pain and is totally worth the money to outsource it. In fact, we recommend that our customers outsource their payroll even if they only have ONE person on payroll. Here’s a little secret of ours… We won’t even do our customer’s payroll tax filings. We’re happy to process and manager payroll, but we outsource all the deposits and filings. There are masochistic companies that actually specialize in this and we’re happy to let them do it! Regardless, here are some of the requirements and the pieces we make sure get filed for you.

Quarterly Payroll Tax Reporting Requirements

  • For Contractors, there are no quarterly wage and tax reporting requirements. It is the responsibility of the contractor to take care of this for themselves.
  • For Employees, Form 941 must be prepared and sent to the IRS on a quarterly basis. To go along with that, deposits will need to be made weekly, monthly or quarterly based upon your agreement with the IRS.
  • Keep in mind, every locality is a little different. It is very important to be sure to file and deposit any local taxes on a quarterly basis. You will need to check with your local department of treasury to determine what is necessary.

Year End Employer Payroll Reporting Requirements

  • For Contractors, Form 1099-MISC must be prepared and sent to the IRS. This Report discloses annual gross wages for every contractor paid more than $600 for services during a year. The Form must be provided to the contract labor recipient on or before January 31. Copies of the forms must be filed to the IRS by February 28 via a W-3 Transmittal Form.
  • For Employees, you must complete and submit Form W-2 (Wage and Tax Statement).  This Form discloses an employee’s wages and taxes for a given year. It must be provided to each employee by January 31.

So, these are just some of the requirements for payroll taxes. Bottom line, the IRS doesn’t have much mercy regarding employers vs. employees and how you handle their taxes. It is very important to get this right. As always, we’re happy to help out!

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