Common QuickBooks Payroll and Bookkeeping Mistakes are listed below.
The user needs to remember that the Form 1099 should be issued only to the independent contractors and also to the vendors who provide business with over $600. If the user fails to remember that, there are a lot of consequences like penalties which is eventually going to cost a lot of money.
The people working for the user are either independent contractors or employees. It is crucial to have a correct stratification, as some workers may be subject to tax withholding and the user should make sure that the same has been set up in QuickBooks.
It is pretty evident that if a company pays a vendor before obtaining Form W-9 (Request for Taxpayer Identification Number and Certification), it could be subject to a payment of 28 % for backup withholding. This is something nobody would like to prepare for.
It depends upon a liable plan of where expenses are being reimbursed for the correct exclusion of reimbursements for expenses. If there is a business association only, the other reimbursements must be included in as taxable wages.
There is a small issue with small business owners that they always try to deal with payroll matters on their own. However, it leads to experiencing more stress for themselves and may result in costly errors being made. It would be better to hire a ProAdvisor instead who can assist in managing payroll and providing support for QuickBooks Payroll as well.
The withheld taxes should be deposited on a bi-weekly or monthly basis, depending on the pay structure of the user. However, there are some amounts which require a deposit on the next business day. If the user is failing in making such deposits correctly, it can lead to late deposit fees, penalties and also interest charges that could range from 2 to 15 percent.
The thing is that Executive compensation is a subject to the excise tax. If by any chance this is neglected, there is a relief program for users, but only certain omissions are eligible for it.
There are so many instances, where the commute and the travel expenses are not considered to be a taxable income for an employee of your company but there are some distinctive cases like travel expenses for short-term assignments that lengthen and can be a subject to income tax.
In most cases, many rewards are considered to be taxable fringe benefits and the reward cards are considered as cash and should be included in taxable wages as well.
In some cases, the user can include company cars, country club dues, spousal travel and also housing benefits into the taxable fringe benefits but it can certainly be difficult to compute fringe benefit value correctly due to a variety of valuation methods and practices.
At the end of tax payment procedures, the user doesn’t have to face some unnecessary penalties. A ProAdvisor can be hired who can handle this along with reporting.