Outsourcing payroll tasks can be a sound organization practice, however ... Know your tax duties as a company

Many employers outsource some or all their payroll and related tax responsibilities to third-party payroll company. Third-party payroll company can streamline business operations and assist meet filing due dates and deposit requirements. A few of the services they provide are:

- Administering payroll and work taxes on behalf of the employer where the company supplies the funds at first to the third-party.

• Reporting, gathering and depositing work taxes with state and federal authorities.
  
  Employers who contract out some or all their payroll responsibilities need to consider the following:
  
  - The company is ultimately accountable for the deposit and payment of federal tax liabilities. Although the company may forward the tax amounts to the third-party to make the tax deposits, the employer is the responsible party. If the third-party stops working to make the federal tax payments, then the IRS may assess charges and interest on the company's account. The employer is accountable for all taxes, charges and interest due. The company might also be held personally accountable for specific 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 might substantially limit the company's ability to be notified of tax matters including their business.
• Electronic Funds Transfer (EFT) must be utilized to deposit all federal tax deposits. Generally, an EFT is used Electronic Federal Tax Payment System (EFTPS). Employers ought to ensure their payroll companies are utilizing EFTPS, so the companies can validate that payments are being made on their behalf. Employers need to sign up on the EFTPS system to get their own PIN and use this PIN to periodically validate . A warning needs to go up the very first time a service supplier misses out on a payment or makes a late payment. When a company registers on EFTPS they will have on-line access to their payment history for 16 months. In addition, EFTPS allows employers to make any additional tax payments that their third-party service provider is not making on their behalf such as estimated tax payments. There have actually been prosecutions of individuals and business, who acting under the appearance of a payroll provider, have taken funds meant for payment of employment taxes.
  
  EFTPS is a safe, precise, and simple to utilize service that offers an instant confirmation for each transaction. This service is provided free of charge from the U.S. Department of Treasury and permits employers to make and validate federal tax payments digitally 24 hr a day, 7 days a week through the internet or by phone. To learn more, companies can enroll online at EFTPS.gov or call EFTPS Customer support at 800-555-4477 for a registration kind or to speak with a consumer service representative.
  
  Remember, companies are ultimately responsible for the payment of income tax kept and of both the employer and staff member portions of social security and Medicare taxes.
  
  Employers who believe that a bill or notification received is an outcome of an issue with their payroll provider should contact the IRS as soon as possible by calling the number on the costs, writing to the IRS workplace that sent the costs, calling 800-829-4933 or visiting a regional IRS office. For more details about IRS notifications, expenses and payment alternatives, describe Publication 594, The IRS Collection Process PDF.