Taxes are an unavoidable part of running a business. But that doesn’t mean you have to let business employment taxes drive you crazy. You might have a large workforce or a lot of turnovers. But there are ways to ensure that filing your business employment taxes happens right, on-time, and with minimal stress.
#1 Go Fully Electronic
If you aren’t already filing your business employment taxes, reporting, and payments online, this is a transition you should seriously consider. The IRS has done a lot over the past couple of decades to make it easier for businesses to complete their taxes in a timely manner using online resources. You can even make corrections to previous tax returns if you overpaid. (Find those forms here).
If you have a tax professional review previous years’ employment tax returns, you may find that there is a significant refund owed. Of course, you might also discover that you underpaid. But it’s better to find that out and fix it than cross your fingers and hope an audit never happens.
#2 Ensure You are Taking Advantage of Incentives
Do businesses really get money back from the IRS? Do they find legitimate ways to pay fewer employment taxes? Actually, it’s very common with Work Opportunity Tax Credits (WOTC). At Efficient Hire, we’ve helped some customers discover over a million dollars in tax credits that they previously missed. Don’t have a massive, multi-location workforce? There could well be credits that you are owed. And going forward, having WOTC administration built into your onboarding system will help. It will automatically complete forms 8850 and 9061. That will make you feel just a bit better about filing business employment taxes. You’ll know that you are getting back the incentives you deserve each year.
#3 Let Employees Help Themselves
If workers have to go to HR or Payroll to update their W4 forms, this is a drag on your resources. But you could have an HRIS set up with a self-service portal. Then, workers have the option to update their withholding information themselves and everyone is happier. The system you choose should have rules built in that enforce IRS requirements.
For example, the system should not allow an employee to make contradictory selections on their W4. That will mean you have fewer headaches when it’s time to file taxes. That’s because you don’t have to chase employees down and get them to correct their forms—or find that you were withholding the wrong amount all year.
#4 Understand Tax Filing for Seasonal Hiring
Do you do primarily seasonal hiring for tourist season or the holidays? There may be another way to simplify filing your business employment taxes. According to Tamara at the IRS, “If you’re a seasonal employer having paid wages resulting in no tax liability, you’re not required to pay quarterly taxes. In this case, you should check the box for seasonal employer on Form 941 to let the IRS know you don’t have a filing requirement. The IRS will then mail two Forms 941 per year after March 1st.” Check with your CPA to see if these rules apply to your business.
#5 Outsource Tax Management Altogether
You’ve probably noticed that the way to make filing your business employment taxes more enjoyable is to outsource and automate as much as possible. In fact, one of the best ways to ease the burden of filing taxes is to have a trusted payroll partner perform this duty. They can stay on top of all the filing and reporting requirements that change from year to year—because it’s their job to do just that.
It’s a good idea to choose a payroll service provider that has the tools and experience to serve your industry. For example, a payroll company that is experienced at serving restaurants may well have some good insights for how to ensure that you are reporting tips accurately. This can help keep you out of FICA tax trouble. At Efficient Hire, we partner with a number of trustworthy payroll companies. So, feel free to reach out to us for help filing your business employment taxes or a recommendation that fits your business.
