Small Business: Payroll Tax Services
One of the most important services we provide is the collection and payment of payroll taxes on behalf of our clients.
Funds are collected from our clients via ACH and deposited into our tax escrow account.
Four Major Tax Fund Categories
These include Federal taxes (income tax, social security and Medicare), Federal unemployment tax, State income tax withholding and state unemployment taxes.
Some cities and counties also have local taxes but this is much less common.
We track the taxes by deposit due date and make sure that all taxes are paid to the appropriate authority on time. We also file any necessary reports such as Federal form 941, 940 and W2s, State unemployment wage reports and many others.
Staying in compliance with payroll tax deposits and filings is critical to the long term health of any business. Being on our tax service also helps enforce good fiscal discipline by ensuring that all tax funds withheld from employees are secure and available when they are due.
Many businesses have found themselves in trouble because funds withheld from employees were used for other immediate cash flow needs and then were not available for deposit.
Our tax service is warranted and guaranteed to be done correctly. If a penalty is assessed due to a failure on our part, then we pay the penalty.
We also carry appropriate insurance to protect against significant errors or omissions. Generally notices from taxing authorities are easily resolved. Often they are generated in error or turn out to be mere requests for clarification.
For a more detailed explanation of the payroll tax process and responsibilities see this article
Audit and Reconciliation:
Southwestern Payroll takes our obligation to clients very seriously. We take great pride in our secure retention of all client funds.
One way we demonstrate this commitment is by the careful daily reconciliation of all our accounts and the reconciliation of all client funds by type. Each type of funds we collect is segregated in an appropriate account.
For example all funds collected are placed in an account that contains ONLY tax funds, direct deposits, direct checks or processing fees. Additionally, our own corporate operating funds are never co-mingled with client escrow funds.
Each year we hire an audit firm to conduct an SSAE-16 audit. While this audit actually looks at all phases of our operation to ensure security and protection of our clients, it focusses in great detail on the disposition of client funds.
We reconcile that all cash due from clients and all cash payable on behalf of clients is collected and paid. Copies of this audit are available on request.
Have questions about your payroll process?
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