| Payroll taxes due to local, state, and federal | | | | define good as a CPA who can provide years of |
| governments are a major interest for business. For the | | | | references backing their reliable calculation and |
| principal and signing authorities in particular this is a | | | | oversight of payroll tax. Ask the CPA to explain the |
| major issue because should the business fail and | | | | percentage of each pay check for each jurisdiction |
| should these liabilities not be paid current they become | | | | you operate in that should be anticipated to be paid. In |
| the obligation of the principals and signing authorities. | | | | other words, if employee John Doe receives $10,000 in |
| Ignorance is no excuse and bankruptcy does not offer | | | | the city of Topeka, Kansas what will your payments |
| relief. Because of this relying on a payroll company until | | | | be above the $10,000 to the federal government, to |
| you are a relatively large organization with an | | | | the state of Kansas, to the county where Topeka |
| accounting department is wise. Even in this case taking | | | | resides, and to the city of Topeka. |
| steps to protect this area from mismanagement and | | | | 2) Each month verify that payments for each |
| ensuring as principal that you actively oversee this | | | | jurisdiction are reasonably consistent with the |
| responsibility is wise. | | | | expectation given from step 1. If not, find out what the |
| There are a number of good payroll outsourcing | | | | situation is and work directly with your payroll company |
| alternatives. Paychex and ADP are probably the best | | | | to rectify any shortfall or overpayment. Verify at the |
| known. You can choose to either pay the payroll tax | | | | time that all payments are made on time or early. |
| yourself or deposit payments with these companies | | | | 3) At year end ask your accountant to review the |
| and they will remit this for you to the appropriate | | | | payroll tax payments for accuracy and assurance that |
| jurisdictions / revenue collectors. | | | | you are likely fully paid to all jurisdictions. |
| Simply establishing this relationship is not enough | | | | These simple steps will protect the interest of the |
| however. As principal there remains plenty of issues | | | | entity, your employees, and your interest as principal. |
| that can create a tax liability for you personally. | | | | More importantly, the tax systems are very inflexible |
| Because of this, principals and their senior managers | | | | on payroll tax receipts. Effective management will |
| should take a few simple steps to protect themselves. | | | | keep you clear of very aggressive enforcement and |
| The main steps I advise are the following: | | | | collection laws. |
| 1) Sit down with a good CPA with payroll expertise. I | | | | |