Payroll is a necessary part of any business. As a small business owner, you know the value of efficiency. You wear a lot of hats, you have a lot on your plate, and you don’t need to waste time with monotonous administrative details.
However, when it comes to payroll taxes, getting it right—and submitting them on time is imperative for your business. Today is National Tax Day, which can be a stressful time for small business owners, especially when it comes to payroll taxes. With so many different taxes to consider and deadlines to meet, it’s easy to get overwhelmed.
In this blog, we’ll share a few tips to help your small business submit its taxes with success and hopefully make the payroll tax process a bit easier.
Understand Your Obligations
As a small business owner, it’s important to understand your payroll tax obligations. This includes federal income tax withholding, Social Security and Medicare taxes, and any state or local taxes that may apply. Be sure to check with your state and local tax authorities to ensure you’re aware of all your obligations. More than 40% of small businesses have been penalized by the IRS for payroll tax errors—so be sure to double check your calculations.
Stay Organized
Keeping accurate records is essential for managing payroll taxes. Make sure you have a system in place to track employee hours, pay rates, and any tax deductions or contributions. Using an automated payroll software will help you keep track of employees’ records and classifications, tax statements, W-2s, and filing deadlines.
A report by the National Federation of Independent Business (NFIB) found that payroll taxes are the second most burdensome tax for small businesses, after income taxes. Make sure to stay organized throughout the year to avoid getting overwhelmed at year end.
Know Your Deadlines
There are several deadlines you need to be aware of when it comes to payroll taxes. For example, you need to deposit your federal payroll taxes on a regular basis, and file your quarterly payroll tax returns. Make sure you know when these deadlines are and plan accordingly.
Quarterly payroll tax deadlines:
- May 1: Quarterly filings for Q1 2023
- July 31: Quarterly filings for Q2 2023
- October 31: Quarterly filings for Q3 2023
- January 31, 2024: Quarterly filings for Q4 2023, plus all your year-end filings
National tax deadlines this year:
- April 18: Deadline to file taxes or file for an extension
- October 16: Deadline to file taxes with an extension
For taxpayers who live in areas that had disaster declarations, the IRS is offering extended deadlines that apply to various individual and business tax returns.
Areas with extended deadlines:
- May 15 for New York winter storm victims
- July 31 for storm victims in Tennessee, Mississippi, and Arkansas.
- October 16 for disaster-area taxpayers in most of California and parts of Georgia and Alabama.
Take Advantage of Tax Credits
There are several tax credits available to small businesses that can help reduce your tax burden. For example, you may be eligible for the Work Opportunity Tax Credit (WOTC) if you hire employees from certain targeted groups. Make sure you’re aware of all the tax credits that may apply to your business.
Consult a Professional
If you’re unsure about your payroll tax obligations, it’s always a good idea to consult a professional. An accountant or tax advisor can help you navigate the complexities of payroll taxes and ensure you’re in compliance with all applicable laws.
Payroll taxes can be a daunting task for small business owners, but with these tips, you can make the process easier and avoid costly penalties. Remember to stay organized, understand your obligations, and consult a professional when needed.
If you haven’t considered automating your payroll, Get Beyond can help. We make it easy to pay your employees and manage your payroll taxes, keeping you compliant and helping you avoid fines. Learn more today.
This article is provided for informational purposes only. Your business’s circumstances, goals, and objectives are unique to your business, so any information or opinions in this blog should not be construed as legal, tax, investment, financial, or other advice. We urge you to always consult with a professional advisor before making important business decisions.
