Outsourcing payroll duties can be a sound organization practice, however ... Know your tax obligations as a company

Many companies contract out some or all their payroll and associated tax responsibilities to third-party payroll provider. Third-party payroll provider can simplify business operations and help satisfy filing deadlines and deposit requirements. A few of the services they supply are:

- Administering payroll and work taxes on behalf of the employer where the company offers the funds at first to the third-party.

• Reporting, collecting and depositing work taxes with state and federal authorities.
  
  Employers who outsource some or all their payroll duties must think about the following:
  
  - The company is eventually responsible for the deposit and payment of federal tax liabilities. Despite the fact that the employer might forward the tax totals up to the third-party to make the tax deposits, the company is the responsible party. If the third-party fails to make the federal tax payments, then the IRS might evaluate charges and interest on the employer's account. The company is liable for all taxes, penalties and interest due. The company may likewise be held personally liable for specific unsettled federal taxes.
• If there are any issues with an account, then the IRS will send out correspondence to the company at the address of record. The IRS highly suggests that the company does not change their address of record to that of the as it may considerably restrict the employer's capability to be notified of tax matters involving their company.
• Electronic Funds Transfer (EFT) should be used to deposit all federal tax deposits. Generally, an EFT is made utilizing Electronic Federal Tax Payment System (EFTPS). Employers ought to guarantee their payroll suppliers are utilizing EFTPS, so the companies can confirm that payments are being made on their behalf. Employers should sign up on the EFTPS system to get their own PIN and utilize this PIN to occasionally verify payments. A warning ought to go up the first time a provider misses a payment or makes a late payment. When an employer signs up on EFTPS they will have online access to their payment history for 16 months. In addition, EFTPS allows companies to make any additional tax payments that their third-party company is not making on their behalf such as estimated tax payments. There have been prosecutions of individuals and business, who acting under the look of a payroll service company, have actually stolen funds planned for payment of employment taxes.
  
  EFTPS is a safe, precise, and easy to utilize service that provides an immediate confirmation for each transaction. This service is used totally free of charge from the U.S. Department of Treasury and enables employers to make and verify federal tax payments electronically 24 hours a day, 7 days a week through the web or by phone. For additional information, employers can enlist online at EFTPS.gov or call EFTPS Customer support at 800-555-4477 for an enrollment form or to speak to a customer care agent.
  
  Remember, employers are eventually accountable for the payment of earnings tax withheld and of both the company and staff member parts of social security and Medicare taxes.
  
  Employers who believe that a bill or notice received is an outcome of an issue with their payroll service company must contact the IRS as soon as possible by calling the number on the bill, composing to the IRS office that sent out the expense, calling 800-829-4933 or checking out a regional IRS workplace. For more information about IRS notifications, bills and payment choices, describe Publication 594, The IRS Collection Process PDF.