Remember when you were dreaming about starting a business? And how starry-eyed you got when you thought of how much fun it would be to handle your own payroll? No? That’s because handling your own payroll doesn’t just pack the one-two-punch of “boring” and “painful”, but it can be like walking through a very expensive minefield.
If a minefield sounds dangerous, it’s because it is. Here are a few things that could go boom:
401k Fiduciary Responsibilities
You may have heard about some high-profile 401k fee lawsuits that happened over the last few years. Which has inspired some 401k providers to try and fearmonger businesses like yours into buying complicated, outsourced fiduciary services. And while it’s true that the Department of Labor normally assesses a penalty of 20% for fiduciary breaches when you don’t make timely 401k deposits, it’s also true that we can help you avoid problems like this in the first place.
IRS Penalties
Have you ever seen a soft, cuddly IRS agent plush toy? No. Because something that ridiculous isn’t possible on this plane of reality. The only thing the IRS likes more than when you pay all your taxes accurately and on time is when you don’t. They typically penalize you 2% of the required payment if the payment is just one to five days late. Six to fifteen days late increases the penalty to 5%, and sixteen days late or more means a 10% penalty plus interest. There are entire tax penalty calculators online. Good times.
Ever Changing State-By-State Tax Rates
The one thing that binds all the different states together, is their love for constantly changing their overly complicated tax compliance rules. Sure, we could write an epic poem about each state’s tax rules, but chances are, we’d have to re-write each of them while you were still reading. So here’s the short version: States constantly change the rules to increase the chances you’ll be hit with more tax penalties.
Overtime and PTO Requirements
Issues like Overtime and PTO can make your payroll complicated real quick. Some companies discourage or prohibit overtime, because it can become their biggest line item. But whether it’s authorized or not, overtime has to be paid by law. And while you want your hard-working employees to enjoy their PTO, each state has their own PTO requirements. Which are further complicated because of COVID-19.
So what’s the good news?
The good news is we love handling payroll. Not only have we helped dozens of companies just like yours not only navigate the payroll minefield, but even help them find things their CPA may have overlooked. Things that can reduce risks and make you more profitable. So why settle for good enough when you deserve better? Let’s talk about how our experts can bring real financial solutions to the table.
