If you ask an accountant who specializes in handling payroll for business clients what the one biggest piece of advise they have for new accountants is that you should always be thinking of tax season as you go about your payroll duties. By keeping tax season in mind in relation to payroll, you will save yourself hours of work and plenty of headaches.
To help you even further in your accounting practice when it comes to handling payroll for business clients, the Rules of Thumb blog from MoneyThumb would like to share the following five tips that will make your accounting job easier and prepare you and your client for when tax season rolls around:
- Get access to a client’s EIN (Employer Identification Number) as soon as possible. This number is absolutely essential, and if an accountant’s client does not have this number, neither payroll nor taxes can go forward.
- Make sure independent contractors and employees are properly categorized. An accountant can help businesses determine the difference between the two types of workers. Employees are subject to certain tax withholding and government regulations while contractors are not. This is a huge aspect of managing payroll and should be done properly from the get-go.
- Maintain an accurate record of employee compensation terms. Different businesses provide varying benefits and compensation requirements. Many benefits are tax deductible while others, such as bonuses, are subject to higher tax rates. Knowing what benefits are offered is crucial when determining how much money in taxes will be withheld.
- Automatically deposit payroll taxes at the time of collection. Clients depend on accounting companies to make paying taxes easy all year long. If tax payments are not deposited throughout the year, a business could find itself unable to pay what it owes come to the tax deadline, which is disastrous.
- Check and recheck payroll reports. Before submitting anything to state or federal government agencies, make sure to have several independent checking processes. Companies hire accountants to make sure that their payroll, bookkeeping, and other financial aspects of their business are squared away and legal. Although the responsibility of the upholding tax laws is ultimately placed on the business owner, it is the job of accountants to properly educate their clients about the complexities of the tax code.
To help your accounting firm even further when it comes to handling payroll for business clients, the Rules of Thumb blog from MoneyThumb suggest you take advantage of this free webinar titled Six Steps to Growing a High-Margin Payroll Practice presented by Tyler Winn, CPA. The free webinar is on demand, so you can attend at your own convenience.
Another way to streamline the process of handling payroll for business clients is by using the best PDF financial file converters on the market. MoneyThumb’s PDF financial file converters make the payroll process run so much smoother by offering your accounting firm the ability to quickly convert financial files for your accounting ease.