Companies and their payroll tax teams deal with a number of deadlines on a daily basis. Whether it’s cutting checks, processing deposits before the bank closes or filing taxes prior to the federal cut off, these obligations can pile up quickly. Along the way, it’s possible errors occur and mistakes are made. In the rush to get these tasks done, payroll service providers or in-house departments focus on the “now.” As a result, these blunders are never rectified and can become even larger as time goes on. When this happens, many teams focus on reactive, instead of proactive planning. The latter, however, could save companies from penalties and the headaches that go with them.
“An overly optimistic attitude regarding abatements can be costly.”
Attitude and abatements
Payroll tax teams may witness faults with their files and accounts, but fail to do something about them. Their mindset is that the errors are small enough to not cause too many issues. And if they do, the business can always ask for an abatement from the IRS. This action is basically a call for forgiveness for inaccurately completing their tasks.
An overly optimistic attitude can plague payroll tax teams in the long run. Organizations need to remember they’re dealing with the federal government, which has its own responsibilities to fill. Companies can’t rely on the IRS’s delay in sending penalties out or the chance it may waive the fines the business has accrued. It’s important for organization leaders to remember it is in the government agency’s best interest to deny these abatements and keep the penalty in tact. Furthermore, even if the fee is dropped, the IRS is not able to waive the interest.
Although organizations and their payroll teams may believe reactive planning is their best bet, being proactive may be the better choice.
Preparation is key
Instead of sitting on their hands, payroll leaders could save both time and money by acting as soon as they discover a blunder. By correcting mistakes as soon as they’re brought to someone’s attention, companies can avoid government fines and the time it takes to file requests for abatements. Businesses can look over their records on a daily basis, scanning for flaws that could cause future troubles. Other steps organizations can take are pre balancing their accounts, verifying employee Social Security numbers early and looking for negative totals.
It’s common for businesses to get overwhelmed with the amount of obligations they have. Payroll tax responsibilities are some of the most important, especially if companies aren’t proactive with their tasks. Organizations sometimes need additional assistance to ensure their payroll taxes are taken care of accurately and in a timely fashion.
PTM provides companies with best practices for payroll and tax completion. Offering advice along the way, PTM understands IRS rules and tendencies and shares actionable steps company leaders can take to keep their responsibilities under control.