Federal 941 Payroll Tax Payment Guidelines

Many business owners don't realize how important it is to get payroll tax payments made on time. If a late payment is made, once the IRS catches up to it, the penalties are quite stiff: 10% off the top, plus interest. Try earning that at a bank today! Resist the temptation to pay late, because it's not a money saver, it's a money loser. Plus, penalties are not deductible.

Quick Tip: the IRS uses the term "tax deposit" to mean "tax payment", and uses the term "monthly depositor" or "semi-weekly depositor" to mean "monthly payer" or "semi-weekly payer", respectively.

Determine Your Payment Schedule

Before you can determine when the tax payment is due, you must first determine if you are a monthly depositor, or a semi-weekly depositor. Which type you are has nothing to do with when or how often you pay your employees. In order to determine which schedule you are on, examine the payroll records during the "lookback period". This period always runs from July 1 to June 30. For 2006, the "lookback period" runs from July 1, 2004 - June 30, 2005. If the amount you withheld for 941 taxes is $50,000 or less, you are a monthly depositor. If the amount during that period is more than $50,000, you are a semi-weekly depositor.

Monthly Depositor

If you are a monthly depositor, you will pay the taxes by the 15th of the next month. For example, for 941 taxes withheld during August 2006, the payment was due on Friday, September 15. If the 15th falls on a weekend or Federal holiday, the payment is due the next business day.

Semi-Weekly Depositor

If the payday falls on a Wednesday, Thursday, and/or Friday, the deposit is due on or before the following Wednesday. If the payday falls on a Saturday, Sunday, Monday, and/or Tuesday, the deposit is due on or before the following Friday.

The $100,000 Rule

Regardless of which type of depositor you are, if 941 withholdings reach $100,000 or more, a payment is due the next business day, and the semi-weekly deposit rules are in effect going forward.

Payment Methods

You may make payments one of three ways:

The IRS will send you a yellow booklet containing coupons. Fill one out, and take a check to your bank. Be sure to fill out the top stub of the coupon for your records. Use the Electronic Federal Tax Payment System. Visit www.eftps.com for more information and to sign up. Allow about two weeks for the enrollment process to complete. Other types of taxes can be paid as well, using this system. Find a payroll provider who offers electronic payment of employment taxes, and enroll in that service.

Avoid Costly Penalties

Don't pay late Pay using the correct method Pay the correct amount

Source: http://ezinearticles.com/?Federal-941-Payroll-Tax-Payment-Guidelines&id=329664
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Employee Lesaing, PEO, Or Payroll Leasing - What's In A Name

In a world where it is increasingly common for business owners to outsource their payroll, workers' compensation insurance, and HR to guys like me, a more appropriate question is "why all the names?", when all three of the terms in this title correctly describe exactly what we do.

That's right. You can pick your favorite of the three, and use the second as a definition, and the third for...well, I guess, redundancy! This confuses PEO prospects, PEO referral sources (insurance agents and accountants), and if you are reading this than it probably confuses you, too. (Chances are that you are familiar with one of the three terms, and the other two sounded like sort of distant half cousins, right?) Now you know that you are in good company.

Therefore, having clarified this situation for you, you may now use whichever term you prefer to describe my industry. (We PEO-owners & enthusiasts just hope it's nice!) For the traditionalist, the term "employee leasing firm" is what the founding fathers used when the industry began in the mid-80's.

The contemporary may opt to address us with the term "PEO" which is the most commonly used term and most searched term for my industry on Google. (It is worth mentioning that "PEO" stands for "professional employer organization" and that our industry association and lobbyist is NAPEO).

The progressive-minded may prefer the more edgy term "payroll leasing firm" which just recently has come into vogue.

Not to digress, but PEO brokers offer the same 3-name ambiguity, too. (PEO brokerage firms are businesses that represent several different PEOs. The relationship is similar to the way in which insurance agencies represent a multitude of carriers).

PEOs and PEO brokers somewhat informally agreed several years ago to phase out the term "employee leasing". In theory, it made sense at the time to simplify the verbiage, favoring the term used within NAPEO's name. In practice, most industry insiders, including me, agree that it is too risky from a marketing standpoint to abandon the older term, although it is often relegated to parenthesis, next to the term PEO.

In closing, you are always welcome to check out the terms HRO, ASO, and BPO if you want to get confused all over again.

Source: http://ezinearticles.com/?Employee-Lesaing,-PEO,-Or-Payroll-Leasing-Whats-In-A-Name&id=944611
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How Easy is Payroll?

The Institute of Pension and Payroll Management (IPPM) has a saying developed and used by its members: "We don't simply do payroll, because payroll isn't simple". Recently the Inland Revenue has introduced major changes which affect payroll and include legislation covering extended maternity leave, new paternity leave and payment rules, student loan repayments and many more.

Any company offering Stakeholder Pensions to its employees needs to be aware of the rules governing the application of pension through payroll.

Payroll becomes a juggle of paying employees, understanding the legislation and how to apply it and then ensuring compliance with the PAYE and National Insurance audit groups.

Over the next few years there will continue to be changes in legislation applicable through payroll. The IPPM and other organizations constantly lobby the government departments to ensure that new laws do not make the job of the payroll managers more and more difficult. The IR is in the process of introducing electronic filing which should make a big difference at the end of the tax year, especially to large organizations, but also throughout the year when form will be downloaded and returned electronically. All organizations will be expected to file paperwork and to pay the Inland Revenue electronically. This will be phased in with large organizations initially and smaller ones by 2008.

One major change recently has been the increase of National Insurance contributions. Not only has the percentage increased but the upper limit 1% has resulted in most people paying more NI. National Insurance does not only apply to the gross pay provided for employees but also to many employee benefits. A number of companies have been caught out by this change because it complicates the completion of P11Ds, often produced alongside payroll.

It sometimes seems that the Inland Revenue takes delight in finding ways to complicate tax and benefit legislation and there are some of these that catch out smaller companies.

The problem is that should any of these be picked up in a PAYE or National Insurance Audit, the company is responsible for payment, rather than the employee.

Here are some examples:-

• Any amount of money paid to the employee, except where it is explicitly for business expenditure, is liable for tax and national insurance and should be paid through the salary.

• If the company gifts an employee with virtually anything, the value is liable for tax and national insurance.

• Fortunately paying the costs of employee's business mobile phone is no longer seen as a benefit but any home phone paid by the company is a benefit in kind.

• Any fuel for private mileage paid by the company is a benefit and is liable for Tax and National Insurance.

All businesses need to ensure that the payroll and benefits are handles by a competent person, or otherwise outsourced to the accountant or a payroll bureau. Payroll bureaus can be expensive, but they don't need to be so it is best to shop around. It is no longer necessary to do a manual payroll although surprisingly large numbers of companies do just that. There is excellent and reasonably priced software around, both for payroll and P11ds but in buying software, do ensure that the Inland Revenue has approved it and that it is supported, improved and updated every year. Administrative or payroll staff who have some knowledge of the PAYE and NI legislation are invaluable to an organization.

Payroll is seldom simple but it is vital to every business. Ask the employees! If the payroll is a day late everyone knows about it!

Source: http://ezinearticles.com/?How-Easy-is-Payroll?&id=332923
change management

Direct Payroll Loans

Payroll is defined as fixed periodic wages received by any worker in exchange for the work done for an organization. Direct payroll loans are loans given to a person on the basis of what they earn. It is an advance on the paycheck. It is also known as a payday advance, payday loan, payroll advance or cash advance. This kind of loan can be taken through various payroll loan providers.

The payroll loan is a short-term personal loan. It is repaid on the next payday by a preauthorized electronic withdrawal from the borrower's checking account. The rate of interest is generally around 20 percent. The loan amount is generally anywhere between $100 and $500.

Payroll loans can be easily applied for on the Internet. A prospective borrower must visit the website and fill out an application. Once they have been approved, they may request a loan by submitting the payroll loan amount and the date of their next payday. Once this information has been processed, the applicant receives a conformation. The amount is usually credited to their checking account within 24 to 48 business hours.

Web site loan providers usually offer calculators to check out the gross and take-home pay. However, these figures are generally estimates based on the approved amount and not the exact figures.

The general requirements for approval of a loan are that the borrower must be in a t job for at least 3 consecutive months. The take home pay must be a minimum of $1000.00 monthly, after taxes. The applicant must have a valid checking account and must be able to provide a valid current home and work phone number.

Source: http://ezinearticles.com/?Direct-Payroll-Loans&id=353420
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Outsourced Payroll Results in Fewer Tax Penalties, Study Finds

A new study reveals that outsourcing payroll functions reduces payroll tax penalties. The study, conducted by Empagio Human Resources Outsourcing, was conducted online during the month of September 2006. 209 financial and human resource executives participated in the study. The titles of these people ranged from CEO, CFO, president, vice-president, director, and manager. The results of the study did not reveal the sizes of the companies represented.

Reduced Dollars Spent on Penalties

72% of those participating in the study said that outsourcing their payroll reduced the actual dollar amount of tax penalties being paid to various government agencies. Only 1% said their payroll tax penalties increased by outsourcing. The remainder, 27%, said there was no change in the dollar amount of tax penalties by outsourcing.

Reduced Frequency of Tax Penalties

69% of those participating in the study said that the frequency of paying tax penalties was reduced by outsourcing their payroll. 2% said the frequency of paying tax penalties increased by outsourcing, and the remainder, 29%, said there was no change in the frequency of paying tax penalties by outsourcing.

Why Should Businesses Reduce Payroll Tax Penalties?

There are three important reasons businesses should strive to reduce payroll tax penalties:

Payroll tax penalties are quite stiff; paying them damages cash flow Payroll tax penalties are not deductible on tax returns Late payments and filings are frustrating to those who are responsible for them; decreased productivity results

Unlike other business expenses, there is no financial benefit to paying payroll tax penalties. They are truly a drain on business resources, both the human side and the financial side.

Why Does Outsourcing Reduce Payroll Tax Penalties?

Payroll providers are trained in the complex task of payroll. Because of all the different federal and state taxes and regulations, wage bases, reporting requirements, and payment requirements, payroll is a tedious maze of timetables and decisions. Proper training and experience are important to getting the task completed correctly.

If your business runs payroll in-house and has been paying payroll tax penalties, consider outsourcing this important function. Many of the smaller payroll providers offer inexpensive payroll solutions with a wide range of up-to-date features, such as direct deposit and electronic filing at no additional charge.

Source: http://ezinearticles.com/?Outsourced-Payroll-Results-in-Fewer-Tax-Penalties,-Study-Finds&id=340438
accounting blog news

Cash Payroll Loans

A cash payroll loan, another name for a quick payday cash loan, cash advance or instant cash loan, is one of the fastest and easiest ways to obtain access to cash to cover emergency financial needs. When you encounter a difficult financial situation, such as urgent medical and/or credit card bills, and you do not have enough cash on hand to cover these expenses, you can turn to a financial lender offering cash payroll loans to solve your financial problem quickly and conveniently.

A cash payroll loan is a short-term loan that covers an emergency need for cash or other short-term financial problem. These loans are designed for employees who need to bridge a cash flow gap between paydays. Getting a payroll loan is fast and easy. You can apply for a $500 to $3,000 loan and once it is approved, the cash is deposited into your account immediately. These types of loans are offered by various financial lenders, such as banks.

In the past, if you needed to get a cash payroll loan, you would have to personally go to traditional lenders. Now, using the Internet, securing a cash payroll loan is fast, easy and convenient. You can visit an online financial lender and apply for a cash payroll loan using a secure Web site. The online environment also provides you with more choices and allows you to compare interest rates, payment terms, and other important factors before you make a choice.

So if ever you find yourself in need of cash and your next payday is still a few days away, you can look for cash payroll loan deals and apply for fast cash. You don't need to have collateral or even make a down payment. You don't even need to have a good credit record. However, to ensure that you don't into a debt trap, pay your cash payroll loan as soon as you get your paycheck.

Source: http://ezinearticles.com/?Cash-Payroll-Loans&id=353354
Franchising

Small Business Bookkeeping Outsourcing Rescues You from Workload

Outsourcing is a special service that unfolds the practice of handling various business related tasks in less money. It is quite beneficial for small business organizations, as it can help to save thousands of dollars. Small business bookkeeping outsourcing is meant to relieve business owners from those pressures that crop up at the time of overload of work. It is quite popular that small business owners try to handle every department on their own. On other note, keeping a trained staff to handle their bookkeeping work will accompany so many expenses. Just think that how a small business will run if it is paying so much to its staff.

Bookkeeping involves handling of the financial records, business revenue, profits and losses incurred by the company and various other expenses. At the time of tax session, if you are loaded with excess of bookkeeping work then the slight negligence can cause problems. Every single account can go wrong or the expenses and balances may not tally in this matter. At this point of time, outsourcing comes at your rescue. Outsourcing these services will not only save your time, but also money. In fact, you will be able to handle your small business with much more efficiency.

Bonus, gratitude, house allowance, conveyance changes, funds and various other things increases the expenses so much. This is not the only problem of hiring a trained staff, higher salaries is another factor to be considered. Small business bookkeeping outsourcing enables you to transfer your work to outsourcing companies. Usually, outsourcing companies carries out bookkeeping work in much less amount as compared to in-house staff. So, why not outsource the work rather than overspending. This will help you in concentrating on other profit reaping departments.

Bookkeeping outsourcing gives excellent quality work to any business. Because of the professional small business bookkeeping outsourcing staff, the work is handled with much efficiency. They are trained specially for this task only. Another thing to be noticed is that, these professionals do not handle any other department or aspect of the business like a business owner. They are able to concentrate completely on their task and this is the reason for their efficiency. If you think that the bookkeeping work is not being handled properly and there are chances of negligence, bookkeeping outsourcing will surely help you.

Outsourcing service helps you to cut down on a huge amount of expenditure. Well, these savings can also be invested in enhancing the efficiency of other departments to earn huge rewards. After all, every company in the business world is doing business to earn profits by spending less amount of money. Small business bookkeeping outsourcing is the best help that gives desired benefits to companies. This service accompanies various benefits such as performing efficiently in other areas of your business after transferring some of your work, saving maintenance cost of the accountant, the insurance benefits, general liability insurance and many more. Bookkeeping has always been a monotonous task for numerous companies. And outsourcing is like a help to the drowning person.

Source: http://ezinearticles.com/?Small-Business-Bookkeeping-Outsourcing-Rescues-You-from-Workload&id=348523
customer services

Choosing A Payroll Accounting Software For Small Business

You need people to run a business unless you happen to be a one-man-industry. So, if you have employees, you have payments to make, taxes to deduct from the salaries and send the deducted money to the state exchequer. In case of larger establishments, these things are taken care of by the professionals, who are experts in the area, which takes the accounting load off the higher management.

But if you own a small business, you need to take care of the payroll all by yourself. The old paper system, quite obviously, is too cumbersome and time consuming to fit today's business needs. Therefore, what you need is an efficient payroll accounting software.

A small-business payroll software manages payroll and taxes in a small business establishment. Now, you may be in a fix as to whether or not your establishment is a small business. The answer is quite simple. If you have less than 500 employees, your business is small business for the purpose of getting an accounting software. In other words, irrespective of how much revenue it generates or the amount of profit you might be making, if you have less than 500 employees, you just need a payroll accounting software designed for small businesses.

The tedious tasks of figuring, documenting and executing a payroll is made easy by payroll accounting software whether it is on monthly, biweekly or weekly basis. So far as the cost of the software is concerned, it depends upon the number of employees and the duration of payment. Other than that, the state where your company is located together with the tax procedure followed also matter. These factors influence the features in the software, which, in turn, affects their prices.

Executing payroll is a complicated process and involves skilled manpower. That's the reason why even small businesses have to have full time employees specifically for this purpose. A payroll accounting software reduces the necessity of the payroll executors and makes the whole exercise far smoother, faster and accurate. What is further heartening is the fact that these software are constantly evolving and are getting faster, friendlier and more accurate.

While choosing a payroll accounting software you must also keep in mind the growing needs of the company. So, get a software that is flexible enough to accommodate a reasonable amount of work expansion. It is also advisable to purchase the software that comes with an assurance of an up-gradation later in time. The best deal is the one that give you the most for the least.

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Payroll Check Cashing

It is normal for employers to hate paydays, although not so much because it is the day they have to pay their employees their due but because doing so involves a lot of counting and computing. Computing individual salaries and giving the accurate amount to every employee is definitely taxing and may cause much confusion. To avoid all these troubles, many employers have opted to release payroll checks instead of actual cash during paydays. With payroll checks, employers no longer have to worry about counting cash.

But while payroll checks offer convenience for employers, they offer the opposite for employees, especially if the employee is 'unbanked' or 'under-banked.' Long lines, limited banking hours and tons of requirements often pester employees each time they cash their payroll checks at the bank. There?s also the additional trouble of paying a check cashing fee, although often minimal, for every payroll cashing transaction for the 'unbanked' and the 'under-banked.'

Because of various business developments and technological advancements, payroll check cashing is no longer very inconvenient for employees. Banks are no longer the only establishments where you can cash payroll checks. Nowadays, you can cash a payroll check from a check-cashing center, which often requires a very minimal check-cashing fee and can process the check in less than 5 minutes. For more convenience, you can also cash your payroll check from the various check-cashing kiosks that can be easily found in major shopping centers and many convenience stores.

Another technology being developed today, which is, in fact, already being used by many companies today, is the payroll card. The payroll card is a plastic card that employers can use in place of payroll checks. This new technology allows employers to directly load an employee?s salary to the card, making cash transfers more convenient on the part of the employer.

With new technologies and various developments in the business world, payroll check cashing is no longer as inconvenient as it was years ago. And with more technologies being developed in the area of payroll check cashing, payroll checks and related instruments may soon be seen both by employers and employees as more practical than handing out salaries in cash.

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Keeping Up To Date With Changes To Payroll Tax Laws

The typical American business comes in all types and sizes. In fact, one might argue that there is no such thing as a "typical" American business. The business community in this country consists of multinational corporations having tens of thousands of employees, countless small sole proprietors with just a single employee and virtually everything else in between. One thing that almost all of them have in common is that they must deal with the responsibility of paying employees and complying with numerous payroll related tax and regulatory obligations. This can be an especially burdensome task for small business owners. Larger companies can afford to have full time staff dedicated to managing payroll issues as well as keeping up to date with the frequently changing payroll laws. This is seldom the case for owners of much smaller companies. So exactly how does a small business owner go about maintaining compliance with the ever-changing state and federal wage and payroll related regulations? The following paragraphs will serve to illustrate the importance of keeping up to date with these rules, as well as discuss the best methods for businesses to go about remaining compliant.

Without a doubt one of the reasons that so many business owners have such a hard time dealing with payroll tax matters is because in addition to numerous deadlines for filing, the rules of the game can change often. Just a few examples of the changes to federal payroll guidelines made in recent years include:

Electronic Filing Requirements- New regulations were recently released that require certain corporations to electronically file their payroll taxes. Beginning in 2007, the electronic filing requirement will be expanded once again.

New Form for Nearly 950,000 Small Businesses- Beginning in 2006, certain employment tax filers will file the new Form 944 (Employer's Annual Federal Tax Return) once a year rather than filing Form 941 (Employer's Quarterly Federal Tax Return) four times a year.

Refund of Tax Penalties-Here is one that many business owners should actually like! If your business was assessed a penalty by the IRS for filing a late or inaccurate tax form, and if this was your first infraction, you could be entitled to a refund of that penalty if all of your forms and deposits are timely and accurate for the next full year.

Revised Employers Quarterly Federal Tax Return Document 941- The Internal Revenue Service unveiled a new version of the employment tax return Form 941. More than 23 million of these forms are filed annually by 6.6 million employers. The Form 941 is used to report wages, tips and other compensation paid, as well as Social Security, Medicare, and income taxes collected.

Standard Mileage Rates Increased-Many businesses pay a mileage allowance to their employees that reflects the allowable tax deductible mileage rate set forth by the IRS. The IRS has in the past adjusted the standard mileage rate during the year to reflect increases in the price of gasoline. For example, From Jan. 1 to Aug. 31 of 2005, the standard mileage rate for business use of a car, van, pick-up or panel truck was 40.5 cents a mile, compared to 37.5 cents a mile in 2004. Effective Sept. 1, the rate increased to 48.5 cents a mile.

How important is it for a business to stay up to date with payroll regulations? First, remember that there are literally thousands of wage and payroll related regulations set forth by the Internal Revenue Service alone. Then bear in mind that each state also has its own set of regulations for business owners to follow. Now consider that according to statistics form the IRS, more than 13,000 small businesses were audited in the year 2004 (this figure does not include larger corporations with more than $10 million in assets) and that the IRS brought in more than $41 billion dollars in total enforcement revenue during that same year (this figure includes enforcement revenue from both payroll and non-payroll related sources).

One way to make sure that a business follows the rules is to enlist the help of a professional who has experience in dealing with payroll matters. Most often, outside help will come in the form of either an accountant or a payroll service provider. Accountants will typically provide tax filing services and for a fee may advise clients on payroll related matters, even if the accountant is not the person actually producing the paychecks. Some accountants will produce the paychecks for a client as well, though not all will do this. The other option is to utilize the services of a payroll provider. A payroll company will typically handle all aspects of payroll, from weekly paychecks to filing the correct tax documents on time, making tax deposits to the IRS and to the proper state regulatory body, providing year end W2 statements to all employees, as well as direct depositing employee checks electronically. The cost of these services varies, but a typical rate might be in the range of $40 to $50 for each pay period for a small business with approximately 10-20 employees. The cost of payroll services will typically go up by $1-$2 for each additional employee.

Of course, not all businesses choose to enlist outside assistance. With the help of software programs such as QuickBooks and a little time spent studying the relevant payroll regulations, many business owners choose to tackle payroll on their own. In fact, the IRS has a section on their website that outlines both the basics of the current federal payroll laws, as well as regular updates to payroll laws as they occur. You can learn more about federal payroll regulations by going to the employment taxes section of the IRS website at http://www.irs.gov/businesses/small/content/0,,id=98942,00.html. State laws vary from one state to another, but most states do have similar information available on their websites as well.

Source: http://ezinearticles.com/?Keeping-Up-To-Date-With-Changes-To-Payroll-Tax-Laws&id=372279
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How To Buy Payroll Services For Small Businesses

Small businesses that do not want to deal with or do not have the resources to deal with payroll management and administration, seek professional payroll service providers. They are cost effective, more experienced, reliable, well trained and takes care of mundane chore such as paying employees, and filing taxes etc., saving valuable time that can be devoted to building and running the business successfully.

It is a time consuming as well as exhaustive task to manage the payroll requirements of a business. Trained personnel are needed to be up to date, maintain employee work schedules, their leave calculation, be informed about hiring of an employee as well as aware of those who have be fired etc. so it is easier done by an experienced payroll service provider. When the business has to pay payroll taxes in different states it is better to opt for buying payroll services for small businesses.

The payroll service provider takes care of calculating and getting paychecks ready on time, printing and delivering checks, calculating tax obligations, check signatures, direct deposits, offer tie-ups with retirement plan funds, filing of federal and state payroll taxes etc.

Things to Consider While Contemplating Buying Payroll Services for Small Businesses:

Carefully consider if your business can afford to outsource payroll services and if it will be cost effective.

Research on the Internet, look up the yellow pages, ask people to recommend a good payroll service provide.

Make a list of all possible candidates, call them, and enquire about the services they offer and the costs. Carefully analyze by comparing all the firms, which one offers the best service at the price you can afford.

Make sure the terms are straightforward and hat there are no hidden clauses.

Be certain that the firm you select is a stable and reputable one that services several businesses other than yours.

Beware of expensive add on services that may escalate your costs.

The payroll service provider has to be experienced in handling your kind of business requirements.

These are a few things to be considered while you buy payroll services for small businesses.

The payroll service provider usually cost about $3 to $5 per check processed, with additional fees for the other service it provides such as delivering checks, calculating tax obligations etc. web-based payroll service providers are gaining popularity as the small businesses have to enter relevant data in a secure website and payroll service provider works using the data provided.

Compare prices and services before deciding to buy payroll services for small businesses. Select a provider who is reliable and trustworthy. It can work to your advantage saving time and money, which can be utilized to achieve target goals.

There are firms that sell services as well as products to run businesses efficiently and effectively.

Source: http://ezinearticles.com/?How-To-Buy-Payroll-Services-For-Small-Businesses&id=377840
Business online blog

Small Business Bookkeeping

Bookkeeping is the process of maintaining records of various transactions of a business. The records include total revenue, gain, loss, expenses, dates of transactions, and many other details. Bookkeeping is the basis of accounting process and it is very important, no matter what business you are in.

There are several advantages of maintaining proper bookkeeping for small businesses. Basically, bookkeeping is legally required for every business. It helps business owners know the exact position of their business anytime they want. Details like gain or loss, the amount due to creditors, dates of transactions, and the amount due from debtors are critical in assessing financial position and bookkeeping helps a great deal in these things. Small businesses have to maintain bookkeeping to be legally and financially sound.

Regular bookkeeping with details regarding transactions, turn over, and profit and loss generations helps small business owners a great deal in getting loans from various public and private financial sources. It is always important to have professionals to maintain books. You can have full-charge bookkeepers who take care of the entire transaction process of the company and/or accounting clerks who can handle specific accounts.

Regularity is one thing which is essential when it comes to bookkeeping. Regular updating is essential in bookkeeping. Maintenance and updating of books should be done on a regular basis - daily or once a week. If updating is not done regularly, one will never know the business' true status. Bank statements which indicate the flow of funds are essential for small businesses.

For many small businesses, transactions are done through invoices and receipts and payments are received or paid through checks or card payments. Bookkeeping can be done manually or can be computerized, depending on the size of the business and transaction volumes. This is usually done by maintaining a monthly spreadsheet of the expenses incurred daily and another to show the sales, purchase, gross, and net profit.

In cash businesses, it is important to keep track of the earnings and expenses for tax purposes. Proper and regular maintenance of books helps the business to a great extent and saves the owner many unwanted troubles.

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5 Ways To Delegate Without A Payroll

Assign Tasks to Kids

Do not underestimate the potential of your kids. Kids can handle some task that you do not have time to do: filing, recording messages, paper shredding documents, etc. My 15 year old daughter is responsible for inputting information from business cards that I collect from meetings, into my contact management system, proof reading documents, filing, typing and other small administrative task. She loves it and it gives her great employability skills and inclusion in my business. It is a great way for kids to receive an allowance and special privileges. It allows me to concentrate on other task without having to hire someone.

Trade or Barter Services

If you are in need for a service that requires the expertise of another professional, trade services with the another business owner to avoid any cost. I currently barter by utilizing the expertise of a marketing coach and she utilizes my time management expertise. I've heard of a hair stylist and message therapist bartering each other's services. It also creates another satisfied customer which will provide referrals for your business. This is a win- win situation.

Get Family & Friends Involved

Your family and friends have an abundance of talents that you can take advantage of for a project or task. You can ask for help from a family member or friend and return a favor or take them out for coffee or lunch in return for their solicited help. Notate their special talents for future reference and include it on a spread sheet for when you may need that particular help. You may need babysitting services for an evening speaking engagement or maybe your aunt is an English teacher who can edit your articles or your cousin has an excellent voice that can be used for your voice mail recordings. Utilize the talents of all!

List Projects on Elance.com

You can list a project on www.Elance.com. It allows your project to be posted for free and you then receive professional bids on completing the project. You the liberty to decide on the most affordable bid that fits your budget and review the bio and expertise of the person or company completing the project.

Contract Projects to A Virtual Assistant

You do not have to hire a virtual assistant to handle all administrative tasks. You can hire a virtual assistant per project, once the project is complicated, the contract is over. The virtual assistant can be hired per project which eliminates hiring a fulltime employee, paying health insurance, and it requires no long term commitments.

Hire College Students

Call your nearby university, community college or training program for available internships from students preparing to enter the workforce and who are in need of work experience to include on their resume and will also require a letter of reference from you for future employment.

Don't feel that you are not alone when there is no room in your budget for additional employees or delegation. Use the above resources and proceed with your projects. Remember you went into business to work on your expertise; don't allow other tasks to take you away from that path!

© 2007 Bridgette Boudreaux

change management

Review and Update Your Payroll Information for Next Year

As another year draws to a close, remember to see your payroll administrator if you've had any of these major life changes this year:

Change of address. Be sure the payroll department has your new address so your W-2 will arrive promptly after it is processed in January. This also insures that all of your benefits providers, such as your health insurance company, can continue to provide you with up to date enrollment information and identification cards.

Change of marital status. Did you marry, divorce, or lose your spouse this year? If so, you should review your federal and state withholding exemptions to make sure the proper tax is being withheld from your paycheck. See your employer for a new W-4 form if you need to make changes to these exemptions.

Birth or adoption of a child. If your family size increased this year, you should also review your withholding exemptions. Increasing the number of exemptions you claim on your W-4 will decrease your taxes each payday and therefore put more money in your pocket. Rather than wait until April 15th of the next year to get a refund, why not get a few extra dollars in each paycheck? With a new baby, I'm sure this cash would come in handy now instead of later.

Does your employer offer a Flexible Spending Account or a 401(k) and have you considered participating in these plans?

Flexible Spending Account. If you have any out of pocket medical expenses each year, be sure to take advantage of this important benefit. In most cases, just about any cost not covered by your medical insurance can be submitted for reimbursement from your FSA. Don't forget about eyeglasses, contact lenses, dentist visits and co-pays when you add up your annual medical costs.

401(k). It's never too soon to begin thinking about saving for your retirement. If you're in your twenties, now is the ideal time to begin saving because you have many years to grow your money. If you're over thirty, what are you waiting for? And, if your employer offers a match to your contribution, you're giving up free money if you don't participate in this benefit. Be sure to ask your employer about signing up for these tax-saving plans.

Make a New Year's Resolution to review and update your employee information every year, and find out about any new benefits you are eligible to participate in.

Copyright © 2006 Kathy Swann

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Forex Trading - Non-Farm Payroll Trading (Are You Insane?)

I understand the allure of trading these wild news events. I used to dream of it myself. It sounds like easy money. Just trade for short periods of time. Make a great return on your investment. It sounds so good!

Then the reality of the issue settles in. Most brokers widen the spread during these times. For example, I know one broker who widened the spread to around 200 pips. Often times it's increased to 50 pips. The "guaranteed" 2 pips spread doesn't exist during times of high volatility.

With spreads like that you're guaranteed to lose. You simply can't trade with a spread like that, and the brokers know it. That's why they have the spread set up like that.

But just for the sake of argument, let's say you found a broker who would let you trade with a regular sized spread during the non-farm payroll release time.

The most common way to trade the news is to straddle it. In other words you place a buy and a sell in the market. Whichever way the market goes first, it will touch that order first. Then the other order is removed from the market, and you work to make profit on your open order.

Well, the market will often whiplash. You may think you guessed wrong and exit the trade at a loss. Then the market will turn and go in the direction you were trading. Or, you'll hang on (thinking that the market is just faking), but it's not. And you'll end up with a huge loss.

In truth, news trading is just like playing craps. It's gambling.

Source: http://ezinearticles.com/?Forex-Trading-Non-Farm-Payroll-Trading-(Are-You-Insane?)&id=451642
change management

HR Payroll Software

Human Resource (HR) payroll software can be defined as a comprehensive accounting solution to meet the demands of modern day payroll process. Payroll requirements are unique and most of the HR payroll packages are flexible and diverse to accommodate the most complex requirements across industries and organizations. Modern day HR payroll packages are versatile and user friendly. This enables the user a choice of sort order, selection of branch, department, position, etc. and other parameters to generate payroll output as per requirement, either on screen or as hard copies. Today's HR payroll packages have a built-in facility to directly mail the salary slip electronically to the employees. It will also have facilities to send salary statements to other branches, salary disbursement outputs to banks as per the bank's format.

Functionality, quality, and quantity of HR payroll packages have grown over the years and each company that provides payroll solutions ensures that their package is totally adapted to the requirement of the user. Modern payroll packages are user interactive, i.e., it will have a web based module which allows intranet or internet based interface for employee self-service. This allows each employee in an organization to view and update certain payroll related information such as income tax computation, leave data, loan data, etc. The salient features of modern HR payroll packages are flexibility, versatility, easy creation of employee details, convenient modules to update data and transfer of data such as salary reports, etc. It will also have modules that would enable the HR staff easier access to monthly loan reports, periodic reconciliation reports, and employee related details such as leave reports, income tax reports, etc.

Most of the big organizations rely on their IT departments for the payroll software, but it is the HR department's responsibility to ensure that the software contains all the necessary modules to manage all payroll functions. Payroll solutions are also available for small and medium-sized organizations; but, before approaching any vendor, the HR staff should be very clear about their payroll needs. Irrespective of whether a business is big, small or medium-sized, payroll packages should be full functioning and reliable for an unlimited number of employees.

Source: http://ezinearticles.com/?HR-Payroll-Software&id=407904
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Tax Attorney Explains How To Survive An IRS Audit

IRS audits can be stressful, time consuming and, in some cases, expensive. This article provides an overview of how to approach an IRS audit.

The first step is always to gather information. Taxpayers should start by locating their tax returns for the tax year being audited and the tax year prior and subsequent to the tax year being audited. Taxpayers should then look for documentation to support any tax deduction or tax credit that they claimed on these tax returns.

Particular attention should be paid to expenses listed on Schedules E (for investment property) and C (for small businesses) and items listed on Schedule A (assuming that the taxpayer opted not to itemize their deductions). Mileage expenses, charitable gifts, contract labor, cost of goods sold, and other unusually large items will draw the IRS auditor's scrutiny.

Also, taxpayers should double check the items of income on the tax returns to verify that they did not omit any items from their tax return. Taxpayers often discover that they omitted interest or dividend payments from small savings or brokerage accounts. In many cases taxpayers fail to report these items due to the investment company failing to send out the required tax documents to the taxpayer. Taxpayers should be prepare to explain any unreported income.

Having copies of each of these items to provide to the IRS examiner can prove very helpful in resolving an IRS audit in a timely manner.

Taxpayers can expect that the IRS examiner will want to meet at the taxpayers house and/or business. The idea is that the IRS can ask the taxpayer to go fishing for additional documentation when they are in these locations. That is why it can be helpful for taxpayers to request to meet at the IRS examiners office.

Taxpayers should also be advised that the IRS examiner's job is to assess the most tax possible. Unfortunately, many taxpayers forget this fact as the IRS audit progresses. The result is typically a notice of proposed adjustment mailed to the taxpayer a month after the IRS audit that is completely out of sync with what the taxpayer expected. To avoid this, taxpayers must always recognize the IRS examiner's role and the taxpayer must be proactive in asking questions and determining what EXACTLY the IRS examiner needs to allow the taxpayer's deductions and credits.

Assuming that there are no items of unreported income and the taxpayer is able to substantiate all of their tax deductions and credits, then the IRS audit should be fairly straightforward. If the taxpayer is not able to substantiate deductions or credits or items of unreported income are involved or the IRS audit uncovers these items, taxpayers should immediately consult with an experienced tax attorney. The same goes for tax periods in which the taxpayer did not file tax returns. The relatively modest cost for an experienced tax attorney can significantly reduce the amount of tax that the taxpayer may end up having to pay.

Source: http://ezinearticles.com/?Tax-Attorney-Explains-How-To-Survive-An-IRS-Audit&id=457170
change management

How to Avoid the Perils of Payroll Taxes

It is the nightmare scenario for every business owner. A letter from the IRS arrives demanding payment for unpaid payroll taxes. The statement list the amount owed along in addition to penalties and interest. Thousands of businesses are faced with this situation every day. Even worse, many of these companies are forced into bankruptcy every year when they are unable to make the payment demanded.

The IRS also considers the problem of unpaid payroll taxes significant. "Payroll taxes represent a significant portion of the IRS's accounts receivable," says Carolyn Stumpf, a spokeswoman for the agency. Fines for a business that collect the taxes but fail to pay the IRS are significant. The IRS considers this their money that is simply held by the business.

But most unpaid payroll taxes are a function of mistakes rather than deception. Depending on the size or your company the time to file is quarterly, monthly or even the day after payday. Missing the due date by even one day can generate a sizable fine. Knowing what to forms to file and when is scheduling problem for a business owner with a million other things they are working on.

Timing is not the only problem. The tax rates that must be withheld are a moving target that often changes as often as congress is in session. There are rates for Social Security and Medicare taxes that have rates for withholding from the employee and the employer contribution. These two taxes sum to the Federal Insurance Contribution Act, FICA.

Federal Unemployment Tax and Federal Income taxes must also be collected from each employee. And that is just for the federal government. There are also taxes that must be collected for the state and even some local governments.

The various rates, numerous schedules and countless forms are enough to make a business owner's head spin. But the failure to get it exactly right is even scarier.

The process starts with a letter and then a phone call. If not corrected the an IRS agent will pay you a visit. If they determine your business is salvageable they can work out a payment plan. If, however, they determine your business is failing then they can sell your assets to collect the money ahead of your creditors.

An even worse scenario exists. The IRS can peruse the business owner or the officers of the company for the unpaid taxes if it defaults.

With such a complex system and such steep penalties it is not surprising that so many companies are turning to payroll services to help them navigate the payroll tax maze. But what criteria should you use to find the right service?

Liability - If there are ever mistakes will your payroll company stand behind you and pay the fines or do you maintain the liability for any errors? You also want to make sure they have the financial security to backup their promises if ever needed.

Access - How will you enter your payroll information? Some services have websites or you may need to call it in to their representative.

Customer Service - If there are ever any changes you need to make how easy is it to contact the service. Make sure you can get a real person on the phone if that is ever needed.

Price - Your costs will primarily vary by how many employees you have and how often you run payroll. Make sure you ask about any additional charges like check delivery or quarterly filing.

By getting several quotes and doing some due diligence you will be getting a good payroll service at a reasonable price. Now you can back to running your business instead of untangling the payroll tax knot.

Source: http://ezinearticles.com/?How-to-Avoid-the-Perils-of-Payroll-Taxes&id=455637
accounting blog news

Unclaimed Payroll Check

Unclaimed or uncashed payroll checks handled incorrectly by an employer can result in serious trouble for the employer. Prior to implementing a policy on how your company handles these types of checks, there are several issues to consider:

Every state has escheat laws that affect unclaimed or abandoned property. In general the laws require that such property, including the funds from uncashed and/or unclaimed payroll checks, be turned over to the state after a designated period. That period and possibly a minimum amount vary from state to state. The state then holds the items for the owner or heirs until a claim is filed to collect the property.

If an uncashed payroll check is voided the money is then available in the company's payroll checking account. If later the funds are not available to pay the employee or to submit to the state the, employer and officers could find themselves under a breach of fiduciary responsibility. If the courts find the actions intentional the court could find criminal intent. Remember once you issue a check for wages to an employee those funds no longer belong to the company in any way. Under no circumstances should the funds from uncashed paychecks be returned to the general checking account.

Even if the employee never claims the money or cashes the payroll check the employee deserves credit on his Social Security and Medicare accounts for wages earned. The wages also need to be reported as paid for unemployment purposes and unemployment tax needs to be paid. Even though the employee did not actually cash the check, the wages are considered to have been paid during the tax year in which the check was dated

The company must report these wages on the 941, 940 and W-2 forms and pay all taxes that are due as if the uncashed unclaimed payroll checks had been cashed on a timely basis. State unemployment reports and taxes will also need to be filed and paid as if the payroll check was cashed.

Your company policy should contain the following items at a minimum:

A method of collecting, reporting and safeguarding unclaimed payroll checks and recording and tracking uncashed payroll checks,

An outline of the steps to be made and the recording of those steps in attempting to contact the employee who has not cashed or not claimed a paycheck,

The specific period of time, which may be prescribed by the State, after which the payroll check will be voided and the monies escrowed pending payment to the employee or the state. The method and place where this will be recorded,

The period of time, which will be prescribed by the state, after which the monies will be forwarded to the state.

The method and place where this payment will be recorded.

change management

Payroll Record Retention Requirements

Every business must retain certain records on their current and past employees, but which ones and for how long?

On the federal level, there are two agencies that regulate record keeping. First is the IRS, which is responsible for enforcing the Internal Revenue Code. The second is the U.S. Department of Labor (DOL). The Wage and Hour Division of the DOL is responsible for enforcement of the Federal Fair Labor Standards Act (FLSA), the Family and Medical leave Act (FMLA), the Immigration Reform and Control Act (IRCA), and the laws governing wages paid by federal government contractors.

Both of these agencies have separate rules regarding the type of records that must be kept and the length of time you must keep the records. To further complicate your requirements there are numerous state, local and other regulatory agencies that may require additional record keeping. State agencies enforce State Unemployment Insurance Tax Acts, state wage and hour laws, child support and creditor garnishment laws and unclaimed or abandoned wage requirements.

Keeping these records accurate and up-to- date is extremely important to the health of your business. Without the proper records you will be unable to meet regulatory requirements should you be audited by any of various federal state and local agencies. Failing to meet these requirements can mean large penalties and the potential for large settlement awards should you be unable to provide the required information when requested.

Internal Revenue Service

The following records must be kept for four years after the tax due date or the actual date paid.

Name, address, occupation, and social security number of each employee

Total compensation and date paid including tips and non-cash payments

Compensation subject to withholding for federal income, social security and Medicare tax Pay period for each compensation period

Explanation of difference in total compensation and taxable compensation

Employees' W-4 Form

Dates of employment (beginning and ending)

Employee tip reports

Wage continuation made to an absent employee by employer or third party

Details of fringe benefits provided to employee

Copy of employee's request to use the cumulative method of wage withholding

Adjustments or settlement of taxes

Amounts and dates of tax deposits

Total compensation paid to employee during calendar year

Compensation subject to FUTA

State unemployment contributions made

All information shown on 940

Copies of returns filed (941, 643, W-3, Copy A of Form W-2 and returned W-2 forms)

Department of Labor

The following records must be kept for three years after date of last entry.

Employee's name as it appears on social security card Complete home address and date of birth if under age 19

Sex and occupation

The beginning of the employee's work week Regular rate of pay for overtime weeks

Hours worked each workday and workweek

Straight-time earnings including the straight -time portion of overtime earnings

Overtime premium earnings

Total wages paid for each pay period including additions and deductions

Date of payment and pay period covered

Records showing total sales volume and goods purchased

Following records must be kept for two years after the last date of entry

Employment and earnings records, employee hours of work, basis for determining wages and wages paid

Order, shipping and billing records showing customers orders and delivery records

Wage rate tables and piece rate schedules

Work time schedules that establish hours and days of employment

Department of Labor

In addition to the general requirements of both the IRS and the DOL mandated by several federal acts. They are:

Family and Medical Leave Act

Basic payroll and employee data Dates FLMA leave is taken Hours worked by employee in last 12 months Hours of FLMA leave for exempt employee Copies of employee notice to employer Copies of general and specific notes given to employees Copies of policy regarding taking of paid and unpaid leave by employee Documents verifying premium payments of employee benefits Records of FLMA leave disputes between employee and employer

Title VII of the Civil Rights Act of 1964 and the Americans with Disability Act of 1990 have no general record requirement under the law, but to meet the requirements all records relating hiring, promotion, demotion, transfer, layoff or termination, rates of pay, and selection for training or apprenticeship should be kept for one year from date of action.

The Age Discrimination in Employment Act of 1967 requires that you keep the following records for three years:

name address date of birth occupation pay rate compensation earned

You also keep the following for one year from the date of action:

job applications resumes response to advertised job openings records related to the failure to hire an individual

You also must keep all records related to

layoff or discharge of an employee job orders submitted to a placement agency employee administrated by employee physical exams used to make personnel decisions job advertisements

The Immigration Reform and control Act requires that you must retain copies of the I-9 Form for three years after the date of hire.

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How Your Business Can Save $6500 per Year

If you run a small business, you probably have a hidden expense that's eating your time, and your business's money: Tracking employee time and productivity.

When businesses are small, traditional practice is to use some sort of manual time keeping system to log employee hours. Each employee fills out a paper time sheet, the payroll administrator goes over the time sheets, cuts the checks, handles the deductions and government paperwork, and deals with requests for time off, overtime and vacation days.

As businesses grow and add employees, this manual system becomes more and more cumbersome. The steps to automation start out small - an automated punch clock and pre-printed time cards, and a rapid switch from manual time keeping to using a spreadsheet.

But even this level of automation requires manual re-keying of data, and as the number of employees grows, the more demanding the needs are for your time and attendance and payroll systems. A lot of businesses end up "trapped" with a legacy system, usually cobbled together out of several different parts, perhaps even with custom programming in the mix.

Payroll accounting is a repetitive and aggravating task which takes up valuable administrative personnel who could be serving your business in other revenue generating capacities. Even with all the automated steps described above, payroll calculation errors account for nearly 10 billion dollars in assessed fees and lawsuits annually in the United States alone. Some estimates say that one in four employers make regular and habitual payroll errors, mostly dealing with withholding or insurance deductions. Others say this estimate is undercounting the problem, and that as the tax code gets more arcane, it will only get worse.

The single most common cause of payroll errors is, well, human errors. Especially in systems with paper based punch clocks or manual time cards, human error (as simple as transposing digits or double entering figures) can be very costly, and cause the need to do adjustment checks or entire correction payroll runs. Most payroll errors are in the range of 1-8%, and even at 1%, when multiplied over several employees, adds up to tens of thousands of dollars of lost revenue.

Human error gets compounded when paper time cards get smudged, coffee gets split on them, employee's "buddy punch" for each other or they just record their time inaccurately. Couple this with the time spent to verify results, and the time spent doing payroll accounting (an average of 7 minutes per time card per employee), and you'll see that a lot of this could be eliminated if you had an automated time and attendance system with integrated payroll processing functionality.

In addition to paying for itself in saved time and reduced error rates, an automated time and attendance and payroll system provides your management team with accurate information about which employees are in on time, and how many man hours (and dollars) are being spent on each part of a project, an important part of cost accounting and project management.

Furthermore, if you ever need to run a labor audit, an automated system gives you total hours worked per employee per day on a project, in real time. A fully automated system also helps prevent "buddy punching" and other tricks that employees can use to cover one another's tardiness or absenteeism. These systems give you the real time data needed to manage your personnel.

Ultimately, using time and attendance software with integrated payroll functionality gives you a streamlined and more efficient set of business practices, which is obviously a benefit to your bottom line. From a manager's perspective, these software packages allow you to look at attendance records by employee, money spent by project, as well as other important information about how your operation runs, all from a simple web browser interface.

These systems can even be used to let your employees do "self service" of several routine human resource related tasks - checking their time sheets, getting access to pay stubs, even arranging shift swaps or schedule changes, all from their web browser at home or at work.

Given the cost of payroll errors, most automated time and attendance and payroll solutions will pay for themselves in under a year by saving time for staff and reducing payroll errors. Indeed, if you assume a business with 20 full time employees averaging 10 dollars an hour - say a retail business - a 1% error rate translates into roughly $6500 dollars a year, which in most cases is much more then the software costs itself.

continuity disaster recovery

Outsourcing Your Payroll Processing - A Great Way To Save Valuable Time And Money

Outsourcing your payroll is one of the most used solutions to companies that are looking for an economical payroll solution. The basic concept is that by utilizing a processing company you are using an expert group of professionals to manage your company payroll needs. Accuracy and reliability are the minimum requirements of a payroll processing organization.

This will allow companies the opportunity to concentrate on developing other departments and concentrate on marketing and product development. By relieving companies the burden of having to staff an in-house payroll department and the expense software that is required to maintain their records.

Outsourcing your payroll to a reliable, professional company will ensure timely employee checks and deposits of federal taxes. Managing and processing your employees checks includes, court required payments, pension contributions, employee record management and accurate reports. In addition, most processing company's mange the timely filing of your payroll tax obligations to the IRS for federal reporting, by keeping track of deadlines and constantly changing laws and reporting requirements.

Proper communication and set with the service company will avoid confusion from the start and throughout their service time. Most processing services are flexible and easily integrate themselves into your business easily. Utilizing an outsourced processing service allows a number of options that would otherwise not be available to your employees, such as debit cards, online reporting and the ability to store and maintain their paycheck stubs.

Many processing services use custom software that is capable of generating checks, reports processing taxes, calculating deductions as soon as the payroll is entered into their system. Taxes are deposited into the appropriate accounts right away, so you will not have to worry about them getting paid on time and will avoid costly penalties and possible fines.

With the advancements in technology and the internet, several companies have begun to offer online processing. A web-based system allows users to securely and accurately process their payroll and print reports and paychecks in there our office.

Processing using an online portal provides a great deal of flexibility for the employer. You can maintain your employee records online, manage your payroll taxes, monitor your expenses and even print checks right from your own computer. All without additional software to purchase, processing online makes great business sense.

When it comes to outsourcing your payroll, by either utilizing a company online or not, there is a good possibility that you will save a lot of time not to mention money. Money that is better on the bottom line.

branding news

Payroll Check Fraud Incident

Payroll check fraud came calling four days before Christmas. A branch of our main bank called and wanted to verify a check. The young lady who took the call in our office quickly realized that the check was out of sequence and for a person not on the client's payroll. The check was cut on our trust account. I spoke to the bank employee who had called us. They were stalling the person by having then fill out an account application, more about that later. I took the location of the bank and called the local police department. Of course I didn't have the right exact city and had to make an additional call. The police finally were dispatched to the grocery store where the branch bank was. The woman trying to cash the check was gone. But the police were fairly sure that they would apprehend her soon. Next day she tried to pass a check on someone else at a different bank. The police were called and she was arrested and turned over on a filed warrant to the police I had called. They had issued a warrant the same day she cashed a check on us and had given the bank as part of the paperwork a copy of her real drivers license. No one ever claimed crooks were smart.

She had cashed eight checks on our account for about eight thousand dollars total. Checks under a thousand dollars are easier to cash.

We have a very sophisticated check with all kinds of safeguards against fraud. Special paper, void pantographs, MICR lock, warning legends, artificial watermarks, colored paper and more. So what happened. The scammer and her cohorts simply copied the information including the MICR information on to new check stock. They actually didn't need a real check; they could have used a copy. They however changed the identifying information for the particular employee the original check was issued to. We currently have not been able to identify that person but we probably will in the end. The scam artist would not have changed the information if they were not interested in protecting the person whose check it was originally. There was no way to make the information on the check not available to the scammer. The employee, the employee's bank and our bank need all that information. So what do we do in the future to prevent this? Positive Pay.

Positive Pay is where we now report every issued check to the bank. They keep a list of the check number, date issued, amount and Payee. Also whether that check has ever been presented before. Any check being cashed at a branch is verified against that list before being allowed to clear. Every check being presented to the bank is verified against that list before being accepted for clearing. This should stop checks like this from being cleared in the future. It will not stop scammers from creating them. There is easy availability of check stock and MICR ink and printers. This may seem like a slam duck to scammers but we are not worrying as much now with Positive Pay in place.

How do you stop this completely? 100% Paperless Payroll! If you are not issuing checks there is nothing for a scammer to create or cash. I have not seen where a scammer has been able to get into the Federal Reserve and NACHA to be able to create fraudulent ACH deposits to their accounts. Even then they would be a lot easier to trace and track down. The scammer would have to be bank customer and have been verified by the bank when they set up an account. For employees without bank accounts Payroll Debit Cards work just fine.

We of course have every intention of assisting the local DA in the prosecution of this person and her cohorts in crime.

accounting blog news

National Medical Support Notice, Employer Requirements

A National Medical Support Notice (NMSN) may be sent to you, if one of your employees has a child support obligation, by a state child support enforcement agency (CSEA). The NMSM is a standardized form that advises you when your employee has been ordered to provide health insurance coverage for a child through your company's health plan.

The NMSN is a federal form that all state child support enforcement agencies must use. If an order has been issued and health coverage is available through the employer, the child must be enrolled by the Plan Administrator.

The standardized NMSN does have some advantages for the employer:

It provides uniform documents so the employer does not have to learn 50 different forms and ways of doing the same thing. The NMSN meets all ERISA requirements under section 609(a)(3) & (4) and is in fact a Qualified Medical Child Support Order. It satisfies state law for withholding employee contributions for the child's health care coverage. It also sets up the priorities for withholding when withholding is inadequate to cover child support and a NMSN. The NMSN states the duration of the medical support withholding and should have the name and address of a contact at the CSEA.

The NMSA consists of four documents. Part A, " Notice to Withhold for Health Care Coverage" Part B, Medical Support Notice to Plan Administrator" Responses to Both Notices

The following five steps are a summary of what the employer is responsible to do under the NMSA without compensation for his time or trouble.

Step One: Determine if the NMSN really applies to you or an employee of yours under the four listed categories. If so complete the response portion and send it back to the CESA it came from. Step Two: If none of the response categories apply send Part B of the form to your Plan Administrator. Step Three: The Administrator should notify you when the enrollment is complete at which time you tell your payroll department or payroll service provider how much to deduct from the employee and on what basis. Step Four: If the combination of the premium amount and the deduction for health care exceed the maximum allowable deduction the employer has to look at state law to determine the priority of the payments. If state law priorities keep the employer from paying the premium complete the Employer Response and send it to the CSEA. Step Five: If enrollment for the child cannot be completed until a future date or until some other action takes place you need notify the Plan Administrator when the employee will be eligible to enroll. You should also notify the CSEA of the time frame involved.

accounting blog news

Payroll Tax Troubles - Employment Taxes Gone Bad

Payroll tax disputes can destroy a small or medium business and have a disastrous effect on business owner's personal finances. This article will provide a general discussion of the typical payroll tax controversy and some tips on how to address payroll disputes.

Payroll taxes disputes often arise when businesses fail to timely file employment tax returns (such as the Forms 941 or 940) and/or when businesses fail to timely remit their employment taxes to the IRS.

In either case, the IRS will assign the matter to a Revenue Officer. The Revenue Officer's job is to interview the taxpayer and third parties in order to (1) collect the tax return and payment in full or (2) gather enough evidence to pin the trust fund recovery penalty on as many individuals as possible.

The trust fund recovery penalty is the mechanism whereby the IRS sidesteps the protections of the taxpayer's legal entity to impose a personal liability on each individual who could have seen to it that the taxes were paid. The IRS refers to these people as "responsible persons." The penalty imposed on "responsible persons" each individual is equal to 100% of the unpaid taxes at the time that the Revenue Officer assesses the penalty.

There are a number of court cases which specify who is and is not a "responsible person" for purposes of this IRS penalty. A number of cases have even held that persons who are the CEO of the company may not be the "responsible person" in some circumstances.

Taxpayers who find themselves subject to this penalty will want to hire an experienced tax attorney immediately. In many cases the tax attorney may be able to convince the Revenue Officer that the taxpayer is not a "responsible person" or make other taxpayer-favorable payment arrangements; thereby avoiding the trust fund recovery penalty altogether.

In other cases the tax attorney can help build a case that the IRS determination as to who is the "responsible person" is incorrect. These facts must be included in the IRS record at the time that the Revenue Officer is working the case and, unfortunately, Revenue Officers do not add this information to the case file without strong pressure to do so.

If taxpayers miss these opportunities, then they still may be able to ask a different function or branch of the IRS to remove the penalty. If that fails, taxpayers can ask the courts to rule that the IRS was not correct in determining that he or she was a "responsible person" and imposing the civil trust fund recovery penalty.

This can be difficult in cases where the taxpayer has failed to timely file employment tax returns. The Supreme Court, in a case that is often cited by the IRS in the payroll tax context, essentially said that there is no excuse for filing a late tax return. A number of courts have echoed this sentiment.

The Third Circuit Court of Appeals has extended this reasoning to say that "yes, there is no valid excuse for filing a late return unless the taxpayer is does not find themselves in the position of the ordinary taxpayer." It is up to individual taxpayers to show how they are not the "ordinary taxpayer."

An experienced and creative tax attorney can go a long way in helping to eliminate, resolve or minimize the damage that employment tax controversies have on small and medium sized businesses and their owners.

Source: http://ezinearticles.com/?Payroll-Tax-Troubles-Employment-Taxes-Gone-Bad&id=536852
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Non Profit Payroll

Non Profit Organizations have some unique situations when addressing payroll and payroll taxes for their employees. Here we are addressing here many of the common payroll situations for Non Profit Payrolls.

Non Profit Payroll: Employee Records

There are many state and federal laws and regulations concerning employee records that can be confusing and some times contradictory. What employee records should you keep to be safe? The following items if you actually have them (and you should) need to be kept in employee's personnel files. We recommend for audit and IRS purposes that you keep them for at least seven full years.

Employee job application Reference and background checks Offer of employment Job description IRS Form W4 State W4 equivalent HLS Form I9 Employee benefit enrollment or declining forms Annual performance evaluations Interim evaluations or disciplinary forms Exit Interview

Additional possible forms to keep

Copies of any statements furnished by employees relating to nonresident alien status, residence in Puerto Rico or the Virgin Islands, or residence or physical presence in a foreign country Any agreement between you and the employee on Form W-4 for voluntary withholding of additional amounts of tax Requests by employees to have withheld tax figured based on their individual cumulative wages and any notice that such a request was revoked IRS Form W-5, Earned Income Credit Advance Payment Certificate, and the amounts and dates of the advance payments

Non Profit Payroll: Payroll Pay Records

Each employee's name, address, and Social Security number The total amount and date of each wage payment and the period of time the payment covers The amounts subject to withholding for each wage payment The amount of withholding tax collected on each payment and the date collected The reason, if the taxable amount is less than the total payment The fair market value and date of each payment of noncash compensation Information about the amount of each payment for accident or health plans The dates in each calendar quarter on which any employee worked for you, but not in the course of your trade or business, and the amount paid for that work, if necessary to figure tax liability Copies of statements employees give you reporting tips received in their work, unless the information shown on the statements is in another item on this list

Non Profit Payroll: Employees

Officers and Directors

The Internal Revenue Code defines the officers of a corporation-president, vice president, secretary, and treasurer-as employees, and your 501(c)(3) must classify them as such for tax purposes. This applies if your organization pays these officers to perform their duties as officers.

A 501(c)(3) should not classify a corporate officer as an employee if he or she performs no services, or performs only minor services and neither receives nor is entitled to compensation.

By contrast, the Code defines the directors of a corporation-that is, members of the governing board-as nonemployees, and your 501(c)(3) must classify them as such for tax purposes. This applies if your organization pays its board members to attend board meetings or otherwise compensates them for performing their duties as directors.

Volunteers

From time to time, some 501(c)(3)s may provide volunteers with awards, or gifts. In general, if these are non-cash items of nominal value, such as a ham around the holidays, your organization should not count these items as taxable wages.

If your 501(c)(3) gives volunteers cash items, such as gift certificates or any other taxable fringe benefit, it must include these items in the volunteers taxable wages.

Employees

If a person is not an officer, director or volunteer and you compensate them for work done and they are not an independent contractor, they are an employee. Like other employers, 501(c)(3)s that pay wages to employees must pay Federal Employment taxes on those wages. These taxes include:

Federal income tax FICA taxes (Social Security and Medicare)

Non Profit Payroll: Federal Income Tax Withholding

Your 501(c)(3) generally (except Statutory Employees) must withhold and pay Federal income tax from its employees' wages.

To figure out how much Federal income tax to withhold, employers should ask employees to complete IRS Form W-4, Employee Withholding Allowance Certificate. Ask each new employee to complete and sign a W-4 by his or her first day of work. Keep the form on file, and send a copy to the IRS if the IRS directs you to do so in a written notice.

If a new employee fails to provide a completed Form W-4, your 501(c)(3) should assume single status with no withholding allowances.

Non Profit Payroll: FICA Taxes

FICA taxes go toward Social Security and Medicare. Your 501(c)(3) must withhold and pay these taxes from employees' wages, with one exception: If your organization pays an employee less than $100 in any calendar year, it need not withhold FICA taxes for that employee. A 501(c)(3) must pay both the amount of FICA tax withheld from employees' wages and the organization's match of that amount.

Non Profit Payroll: Federal Unemployment Taxes

The following is a direct quote from the IRS 940 instructions available at the following link: http://www.irs.gov/instructions/i940/ch01.html#d0e251

"Religious, educational, scientific, charitable, and other organizations described in section 501(c)(3) and exempt from tax under section 501(a) are not subject to FUTA tax and do not have to file Form 940. "

What it comes down to is that if you are a 501(c) (3) and you have received your favorable determination letter from the IRS you don't have to pay Federal Unemployment taxes.

Non Profit Payroll: State Unemployment Taxes

States vary on unemployment taxes on non profits and you should check with your State Unemployment Insurance Department for the rules in the States you have employees.

Non Profit Payroll: Paying Federal Income and FICA Taxes

Your 501(c)(3) must pay withheld income taxes, together with both the employer and employee portions of FICA taxes (minus any advance earned income credit payments). These payments must be paid electronically using the Electronic Federal Tax Payment System (EFTPS) or by mailing or delivering a check, money order, or cash to an authorized depositary. Note that some taxpayers are required to exclusivly deposit using EFTPS. Check with a qualified non profit payroll tax professional for additional information.

Non Profit Payroll: Reporting Payroll Taxes

Once your 501(c)(3) deposits the Federal income and FICA taxes, it must submit returns reporting that it has withheld and paid them. Just as the 501(c)(3) pays Federal income and FICA taxes together, it must report them together on IRS Form 941Employers Quarterly Federal Tax Return. They must also be reported annually on IRS Form W2 a copy of which is also distributed to your employees

Non Profit Payroll: Conclusion

There are many similarities between Non Profit Payroll and For Profit Payrolls but several differences not all of which have been discussed here. We always recommend that you use a qualified payroll outsourcing company with CPA's on staff. That way your questions can be answered professionally and any problems solved by a CPA who is eminently qualified by training and experience to work with the IRS on payroll tax problems.

Source: http://ezinearticles.com/?Non-Profit-Payroll&id=499360
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Maintaining of Paper Invoice Bill by Small Business

In all business whether it is big or small the different account process to handle the bill payment and invoices are nearly same. This account process is of two types: account payable and account receiving. Since these account process deals with cash flow so it should be handle carefully. In this generation Y there is several technologies like online bill payment, electronics invoicing which helps to removes the tedious paper work. But practically till today it has helped but cannot remove the paper work fully.Even today 80% of the invoice come in paper in small business" says the Aberdeen Group research report.

Management of Onslaught paper In Accounts department
Different companies like Kofax, ReadSoft, AnyDoc and Abbyy developed data capture solutions for converting all the paper based invoices, checks, bills, and other documents into data to sent to the accounting or ERP systems. Large companies are using this software to increase the efficiency of the account department and they are successful in it. They have made productive gain in the accounts department.

But small company can not use this software. Instead they do the maximum work manually. They use software only to scan their paper containing accounts documents. This is not a cost-effective solution.

Reason for which small businesses are not using automatic account data capture software Most important reason is cost of this software is high. So small business firm cannot bear it. Not only buy this software but you have to also bear the cost of:
1.. Licensing Fee for the software (User based or CPU based access)
2. Hardware upgrade to install the software
3. Training for your employees
4. Software support and maintenance

This Software may not be suitable for the interface used by you. Then you again have to change the interface to suit the software.

Invoice bill , checks comes in different size and shapes. Important documents like customer name, address, amounts are written at different places in the paper documents. Now if the paper documents contain hand written notes then it may create problem for the software as it may not scan the data properly. Vendors still embraced OCR and ICR technologies into their product to capture the account data accurately from the scanned images. So there is a long way to go to remove manual entry.

The solution for small businesses to improve their different Account process.

Small business must use offshore outsource vendor for different account processes. They can use their existing infrastructure to send the data securely through internet to offshore location to get process by offshore vendor. For more details read Cybelink Secure BPO.

Using an offshore provider will not change the process of management in the accounts department of the small business. Only change is per scanned images will be converted to accounting software or ERP system.

After receiving the scanned images, following are the typical tasks performed by the

offshore vendor.

• 1. Use automated and manual process to extract all the data like invoice number, invoice date, and check number from the images.
• 2. Hardware upgrade to install the software
• 3. Enter extracted data to small business accounts software
• 4. Perform other accounting operations like Invoice preparing, Bill payment, and Check Printing in the small business account software.
• 5. Export the work from the accounting software to a file.
• 6. Send the file to the small business to import it into their accounting software for verification.

After receiving the finished files from the offshore vendor, small business companies can import it into their accounting or ERP systems for verification and further processing it.

Cost of paper document reduces by 50% if this off shoring is done. Small businesses need to overcome issues like offshore security and offshore outsourcing cultural issues. But by carefully managing their offshore vendors' small businesses can gain the cost reduction and operational efficiency in their accounts payable and account receivable operations.

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Why Raising The Minimum Wage So Quickly Is Bad For Everyone.

The minimum wage issue has recently been debated in the Senate and after some debating and amendments; the minimum wage will increase to $5.85 per hour, effective July 24th 2007, $6.55 per hour, effective July 24th 2008 and $7.25 per hour, effective July 24th 2009. Since the minimum wage law was passed in 1996, there has been nine attempts to raise the law and nine attempts failed. To the low income worker a sigh of relief can be heard. The increase in pay allows the lower skilled workers to a greater disposal income and spend on essential items or save for the future. Society benefits from greater revenue in sales tax from the increase in spending. This would help fund need programs in the community.

These are a few of the assumptions that democrats and anyone who is pro an increase in minimum wage wants everyone to believe. This is so far from the truth that it is appalling. John Edwards is so animate that he introduced an amendment to assist with the passage of the bill. He declares the lower class workers need it; they really need this to happen. John Edwards must have failed Economics 101 and slept right through a finance class, since this is not what the lower class impoverish workers need for their salvation. Basically, democrats are saying more money will save you from your money worries and here are a few nickels and dimes to appease you.

Economics teaches us about the law of supply and demand. A business that employees worker at the new wage of $7.25 are forced to raise prices beyond their normal rates. Good old inflation allows business owners to raise their prices at least 3% a year, which is the average inflation rate in the US. Employee's wages is calculated as a variable cost from accounting, and variable cost can be reduced when its price is excessive. The variable cost is figured into the price of the product or service of the company. Employers either have to raise the price of their product to maintain their profitability or lay off employees to stay competitive with other firms.

A business's value chain analysis will appear extremely expensive at any point where workers handle their product from harvesting their raw materials to serving the final product to the consumer. A company that desires to maintain profitable analysis's their value chain to determine the cost drives and implement ways to reducing their overall cost. The increase employees wages, which is a variable cost, has increased dramatically over a period of time, these costs are the first to be reduced by lay offs. Not only lay offs, but reducing the total workforce for their lower paid workers. Have you ever waited in long lines at a fast food restaurant or waited to be seated at a sit down restaurant? Now imagine fewer workers due to costs and more of your valuable time wasted for the same service.

Raising minimum wage is not the solution to the low income workers; this is a political smoke screen by the democrats to pay off this sector of voters. Education increases individual's value to employees, not legislative from Congress.

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Reviews on Top 3 Payroll Tax Software for Small Business

If you have a small business you know that you have to keep all of your financial records as organized as possible to ensure that you can make payroll accurately as well as file an accurate and timely tax return. There are many different programs for you to choose from, which can make the process of getting organized a bit overwhelming. Most programs today are very easy to use, and once you get the hang of it you can make payroll as well as tax payments very easy to deal with.

If you need help with payroll taxes you might want to look at a program such as QuickBooks. This program is manufactured by Intuit and is one of the leading programs for small businesses that need accounting software. There are several different versions available such as QuickBooks Basic, the QuickBooks Pro, as well as QuickBooks Premier. This online tax program has time tracking software that is nice, and the program is available for both Windows and Macintosh based computers. Many find that this has all of the features that they need because it allows them to do tracking, banking, invoicing, statements, and more all in one program.

Another great small business software is Small Business Money by Microsoft. This software has been created with business in mind and allows for users to create invoices, track spending, manage cash flow, handle payroll and so much more. There are different versions of this software available so that small business owners can find the version that best suits them and their specific needs. Many report that they like Money because it is very easy to use, without all kinds of extra bells and whistles that simply get in the way.

If you need help with payroll taxes and accounting you may also want to check out Peachtree. This is a great accounting software that will allow you to track spending, handle payroll, and do basic account management very easily. The software is meant to be used by small and medium sized companies and works much like Quicken and QuickBooks, though some prefer this program and its small differences that it has.

As you can see, there are many different programs on the market today that can help small and medium sized companies handle their payroll taxes and other day to day business maintenance. Many find that trial and error is the best way to find the program that works for them. Making a list of your basic needs will help you find the program that is best for you.

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What's Your CTC?

'IT and IT enabled services' Professionals beware. What you get is not always what you will get.

When you get your offer letter, you will be pleased to find out an impressive looking figure on it. You would also notice that the letter also mentions your salary break-up. The accounts personnel would probably explain you the basic calculations. But you prefer not to talk about it then. At the moment you are overjoyed by winning the bargain. You are on a high. You are delighted and you want to celebrate your victory.

But what happens when you get your first salary? You are disappointed. Why? You feel cheated. Why? You are depressed. Why? Let's find out.

Let's say your package is 5 lacs. You know that your PF is deducted from your salary. Considering components like performance incentive, gratuity, income tax, and other standard components, when you get your salary slip, you find that there is something missing. A portion of your salary is not documented.

Surprisingly, when you calculate the missing amount, you find that it is equal to 12 times your monthly PF deduction. Hold on a minute here. Relax and unfold your salary slip. Now calculate your monthly gross income. Then annual gross and then try to confirm your CTC. You will find out yourself.

Yes! The PF deduction that shows on your salary slip is the company contribution. Your contribution is not documented on your slip. It is documented no where, not even in the offer letter or the agreement letter.

What are you waiting for? Go ahead and confirm. Henceforth before you accept any new offers, beware!

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