Common Payroll Mistakes Is it time to outsource?

by George Simpson | Sep 26, 2018 | Business News

According to the IRS, each year 40 percent of small business owners who handle their own payroll taxes pay penalties for late filings and mistakes. Tax penalties can be expensive, requiring interest and fines on the amount overdue.
The IRS and California’s Employment Development Department’s payroll tax laws are complex. Thus, dealing with payroll taxes on your own may eventually cost you. If you plan to continue handling payroll taxes yourself, you should be aware of mistakes and how to prevent them. The following are a few major ones:
Misclassification of employees: If you are paying individuals as subcontractors, make sure you are doing so correctly and can prove the classification is correct.
Miscalculations: Employers are responsible for proper payment of Medicare, Social Security, and income tax. Make sure you withhold the correct amount and understand how much you, as an employer, need to pay. If your employees work overtime, you must comprehend the complexities of California overtime laws and carefully follow them.
Rushing through payroll processing: You could under or overpay employees and be fined for mistakes.
Incomplete paychecks: You need to provide employees a record of all deductions and how you calculated their net pay.
Depositing late: Follow the correct IRS schedule guidelines for your business, which is either semi-weekly or monthly. Failure to deposit on time can mean penalties.
Failing to properly keep records: Keep accurate records for at least the most recent three years. If you fail to, you do not want to be audited.
Employees working out-of-state: You will likely be required to register in the employees’ home states.
If you have questions concerning payroll taxes, or wish to determine whether you should consider a payroll service, contact us.
For more information concerning Professional Tax Services, call 661-259-1967. Through the EZ2 Thrive program, Professional Tax Services provides unlimited complimentary advice on income and payroll taxes. For information on how you can receive advice at no cost, visit www.scvprotaxservices.com.

[bsa_pro_ad_space id=3]

ADVERTISE WITH US

CLICK HERE

Next Time You Listen To Music, Remember The “60/60” Rule – Audiology Associates

by Kevin Bolder | Apr 29, 2026 | Medical

If you wear headphones all day, every day, this one’s for you. There’s a good chance you’re overdoing it with the volume and potentially hurting your hearing. To spare your senses, it could be as easy as following the “60/60 rule” that’s circulating on TikTok.Instead...

How Food and Drink Can Affect Your Oral Health – May Conte D.D.S

by Dr. May Conte | Apr 29, 2026 | Medical

Have you ever given thought to how what you eat, and drink can affect your oral health? Two of the most prevalent diseases, tooth decay, and periodontal or gum disease, may be preventable by changing your diet. Decay is a result of acids produced by oral bacteria...

Sinus and Allergy – Santa Clarita ENT and Facial Plastic Surgery

by Adam I. Friedman | Apr 29, 2026 | Medical

Sinus and allergy issues are a continual problem for the residents of the Santa Clarita Valley and its surrounding areas. The mixture of frequent high winds and the wide variety of grasses, trees, and weeds in the SCV create a situation where many people have...