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10 Most Common Payroll And Bookkeeping Mistakes You’re Probably Making

10 Most Common Payroll And Bookkeeping Mistakes You’re Probably Making<br>

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10 Most Common Payroll And Bookkeeping Mistakes You’re Probably Making

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  1. 10 Most Common Payroll And Bookkeeping Mistakes You’re Probably Making This article originally published by wizxpert.com

  2. Avoid These Ten Common payroll And Bookkeeping Mistakes That Small Business Owners Tend to Make. 1. Issue Form 1099 Failure You have to remember that Form 1099 should be issued only to independent contractors. And also vendors who provide your business with over $600 in services. If you are Failing to do so, you could lead to steep penalties. 2. If Classifying Employees as Independent Contractors Your workers are generally either independent contractors or employees. Choosing the correct classification is crucial. Different forms are involved (1099 versus W-2), and some workers may be subject to tax withholding.

  3. 3. Neglecting Backup Withholding for Vendor Payments You know that very well if a company pays a vendor before obtaining Form W-9 (Request for Taxpayer Identification Number and Certification). It could be subject to a payment of 28 percent for backup withholding. 4. Think of Excluding Reimbursements for Expenses from Reportable Wages The correct exclusion of reimbursements for expenses depends upon an accountable plan where expenses are reimbursed. Only if there is a business connection, Other reimbursements must be included in taxable wages.

  4. 5. If You Are Doing It All Alone There is a problem with Small business owners. They always try to deal with payroll matters on their own. But it tends to experience more stress and may make costly errors. 6. If You Are Not Depositing Withheld Taxes in a Timely Manner Withheld taxes should be deposited on a semi-weekly or monthly basis. However, some amounts require a deposit on the next business day. If you are Failing to deposit correctly. It can lead to late deposit fees, penalties and also interest charges ranging from two to 15 percent.

  5. 7. Executive Income is Not Including in Non-qualified Deferred Compensation Here is the thing that may be Executive compensation is a subject to an excise tax. You know that if this is neglected, there is a relief program. But only certain oversights are eligible. 8. Excluding Travel and Commuting from Employee Income In many cases, commuting and travel expenses are not considered taxable income for an employee. But there are some unique cases. Like travel expenses for short-term assignments that lengthen can be subject to income tax.

  6. 9. If You Are not Including the Fair Market Value of Prizes, Gift Cards, and Awards in Employee Income Totals Most awards are considered taxable fringe benefits and the Gift cards are considered cash should be included in taxable wages. 10. Appropriate Fringe Benefit Value Not Including correctly You can include company cars, country club dues, spousal travel and also housing benefits into Taxable Fringe benefits. But It can be difficult to calculate fringe benefit value correctly. Due to a variety of valuation methods.

  7. Conclusion So you Don’t have to face some unnecessary penalties from the IRS. Hire a professional bookkeeping service to handle your business payroll tax concerns and also reporting. Because the bookkeeping services give you a tensionless accounting experience and also help you to grow your business. If you want more discussion on this topic. And you have any other question related to your accounting and payroll problem. Dial our toll-free number. To get instant support from our Certified Accountants anytime anywhere in all over the USA. Thanks for visiting us. You are always welcome here to visit us anytime soon if you have any queries in your mind.

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