Outsourcing payroll tasks can be a sound business practice, but ... Know your tax duties as an employer

Many employers contract out some or all their payroll and associated tax responsibilities to third-party payroll service suppliers. Third-party payroll provider can streamline company operations and assist satisfy filing due dates and deposit requirements. Some of the services they offer are:

- Administering payroll and employment taxes on behalf of the company where the employer supplies the funds initially to the third-party.

• Reporting, gathering and depositing employment taxes with state and federal authorities.
  
  Employers who outsource some or all their payroll responsibilities ought to consider the following:
  
  - The company is ultimately accountable for the deposit and payment of federal tax liabilities. Although the employer might forward the tax amounts to the third-party to make the tax deposits, the company is the accountable celebration. If the third-party fails to make the federal tax payments, then the IRS may evaluate charges and interest on the employer's account. The employer is liable for all taxes, charges and interest due. The company may likewise be held personally accountable for certain overdue federal taxes.
• If there are any problems with an account, then the IRS will send correspondence to the company at the address of record. The IRS strongly recommends that the company does not alter their address of record to that of the payroll company as it may significantly restrict the company's ability to be informed of tax matters including their company.
• Electronic Funds Transfer (EFT) need to be used to transfer all federal tax deposits. Generally, an EFT is used Electronic Federal Tax Payment System (EFTPS). Employers should ensure their payroll providers are using EFTPS, so the employers can validate 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 regularly validate payments. A warning needs to increase the very first time a company misses out on a payment or makes a late payment. When an employer signs up on EFTPS they will have online access to their payment for 16 months. In addition, EFTPS allows companies to make any extra tax payments that their third-party company is not making on their behalf such as estimated tax payments. There have actually been prosecutions of individuals and business, who acting under the look of a payroll service company, have stolen funds planned for payment of work taxes.
  
  EFTPS is a safe, accurate, and easy to use service that offers an instant confirmation for each deal. This service is provided free of charge from the U.S. Department of Treasury and allows companies to make and confirm federal tax payments digitally 24 hr a day, 7 days a week through the web or by phone. To find out more, companies can register online at EFTPS.gov or call EFTPS Customer Service at 800-555-4477 for a registration form or to consult with a customer care agent.
  
  Remember, employers are ultimately accountable for the payment of earnings tax withheld and of both the company and staff member portions of social security and Medicare taxes.
  
  Employers who believe that a costs or notification gotten is a result of an issue with their payroll company must get in touch with the IRS as soon as possible by calling the number on the costs, composing to the IRS workplace that sent out the costs, calling 800-829-4933 or visiting a local IRS office. To find out more about IRS notifications, costs and payment choices, refer to Publication 594, The IRS Collection Process PDF.