Cash Flow Planning for Life

The do’s and don’ts of human resources and payroll processing can be expensive!

This is part 3 in my 7 part series “7 Things Every Small Business Owner Needs To Know”.  You can download this entire series in my eBook on my web site – www.Makara-Assoc.com.

For example:

Poor documentation penalties can cost $1,000 per employee, and $10,000 for knowingly hiring an illegal immigrant.

Penalties for failure to file employment forms and/or deposit payroll taxes withheld range from 2 – 15% of the tax, plus interest.

Make sure your company is using the most up to date forms (i.e. W-4’s and I-9’s), keep employee files clean and updated for any and all changes.

A few tips when it comes to employee files:

1. Don’t make notes on applications and resumes, circling the date of college graduation could be evidence of age bias in the future.
2. Don’t keep I-9’s in employee files, keep these and supporting documentation in a separate file again to protect against discrimination claims.
3. Don’t use social security numbers as employee ID’s.

Create a hiring checklist, as missed or uncompleted documents can cost you.

If mistakes are made, payroll processing can be a time consuming and expensive.

Some of the more costly mistakes made in payroll are:

• not paying overtime to nonexempt employees and
• not timely depositing withheld taxes (Trust Fund money).

The rules for payroll are complex, if you or someone on your staff is not fully aware of these rules, hire a payroll service.  It will only take one or two mistakes to pay for the service, not counting the time it will take to correct the error.

If you have any questions, please give me a call at (239) 384-9688 or visit my web site at: www.Makara-Assoc.com.

– Mark

This information is based on facts, assumptions and representations as stated and authorities that are subject to change.  We will not update this information for subsequent legislative or administrative changes of future judicial interpretations.

LEGAL NOTICE AND DISCLAIMER:  The information within this eBook is for informational and educational purposes only and is not tax advice and should not be used as such.  The facts of each individual situation can have significantly different outcomes when applying tax law.  The hiring of a CPA is an important decision not to be based solely on advertisements.