Outsourcing payroll responsibilities can be a sound business practice, however ... Know your tax responsibilities as a company

Many companies contract out some or all their payroll and related tax tasks to third-party payroll provider. Third-party payroll company can simplify service operations and assist satisfy filing due dates and deposit requirements. A few of the services they offer are:

- Administering payroll and employment taxes on behalf of the employer where the employer provides the funds at first to the third-party.

• Reporting, collecting and transferring work taxes with state and federal authorities.
  
  Employers who contract out some or all their payroll obligations should consider the following:
  
  - The employer is eventually accountable for the deposit and payment of federal tax liabilities. Even though the employer may forward the tax amounts to the third-party to make the tax deposits, the employer is the responsible celebration. If the third-party fails to make the federal tax payments, then the IRS might assess charges and interest on the company's account. The employer is responsible for all taxes, penalties and interest due. The company might likewise be held personally responsible for particular unsettled federal taxes.
• If there are any problems with an account, then the IRS will send out correspondence to the employer 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 might substantially limit the employer's ability to be informed of tax matters including their organization.
• Electronic Funds Transfer (EFT) need to be used to deposit all federal tax deposits. Generally, an EFT is made utilizing Electronic Federal Tax Payment System (EFTPS). Employers should ensure their payroll service providers are using EFTPS, so the employers can verify that payments are being made on their behalf. Employers must register on the EFTPS system to get their own PIN and utilize this PIN to periodically confirm payments. A warning should increase the very first time a service supplier misses out on a payment or makes a late payment. When an employer signs up on EFTPS they will have on-line access to their payment history for 16 months. In addition, EFTPS permits companies to make any additional tax payments that their third-party supplier is not making on their behalf such as estimated tax payments. There have actually been of people and business, who acting under the look of a payroll service company, have actually taken funds planned for payment of work taxes.
  
  EFTPS is a safe, accurate, and easy to use service that offers an instant 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 validate federal tax payments electronically 24 hr a day, 7 days a week through the internet or by phone. For additional information, companies can enroll online at EFTPS.gov or call EFTPS Customer Service at 800-555-4477 for an enrollment form or to consult with a customer care agent.
  
  Remember, employers are eventually accountable for the payment of income tax withheld and of both the company and staff member parts of social security and Medicare taxes.
  
  Employers who believe that an expense or notification gotten is an outcome of an issue with their payroll provider need to get in touch with the IRS as soon as possible by calling the number on the bill, composing to the IRS office that sent the bill, calling 800-829-4933 or going to a local IRS office. For more info about IRS notifications, bills and payment options, describe Publication 594, The IRS Collection Process PDF.