Your small Charlotte-based business is doing well and you’ve hired employees to help you with the workload. Now you’ve got to keep a regular payroll in order to compensate your employees for their labor. It’s a relatively straightforward process of calculating their hourly wage times the hours they’ve worked, but you also have to factor in FICA and state payroll taxes. Accounting programs are capable of doing this for you, but they rely on the user having knowledge of federal and state laws regarding payroll deductions. If you’re lacking in this knowledge, you can run into trouble with the IRS and the North Carolina Department of Revenue. Working with a Charlotte, NC business accountant for payroll can help you avoid trouble.
Complying With IRS Payroll Deductions
This is something that can seriously mess up a business owner if they don’t do as the IRS requires. If you are classifying your employees as hourly or salaried, you have to take out payroll deductions that include FICA, also known as Federal Insurance Contributions Act. The money comes from the employee’s wages and belongs to the employee, not the business. Not paying these taxes intentionally is considered theft by the IRS and can get a business in hot water. You have to make sure you dedicate money from payroll to cover FICA every pay period. That means separating money from the account for payroll and depositing it into a separate account or separating it out from your balance sheet and ignoring it’s there until it’s time to deposit to the IRS.
This is where a Charlotte, NC business accountant can help you stay out of trouble by taking over some or all of the payroll functions. Instead of doing all of the calculations on your end, you can supply the hours for each employee to the CPA and let her handle the calculations for wages and submission of FICA to the IRS. Your employees get credit for their contributions and you stay on the right side of the IRS.
Keeping Up With NCDOR Withholding Requirements
The North Carolina Department of Revenue (NCDOR) has a complex method of calculating withholding and reporting payroll taxes. It mirrors the IRS processes in some ways which makes it easy to understand what’s required. But there are areas in which NCDOR diverges completely and has reporting requirements that are unique to the state. In the event you don’t feel you can track all of the differences between the IRS and NCDOR, you can retain the services of a CPA to prepare everything for you and submit forms after you’ve reviewed them. A Charlotte-based CPA makes sure everything is filled out and conforms to state requirements before seeking your approval and submitting the forms to NCDOR.
Other Payroll Factors to Consider
Hiring an employee involves having them fill out forms, known as W-4 and NC-4 to the IRS and NCDOR for the reporting of their withholding. A Charlotte, NC, business accountant can handle this for you and make sure that the forms are filled out correctly so their wages and withholding get reported to their Social Security number and they receive the right amount of credit.
Other issues you may come across are wage garnishments for repayment of debt, child support payments, and non-resident withholding. These all come out of the income of the employee but are remitted to different departments. And in the case of a nonresident alien employee, they have to fill out the NC-4NRA in order to submit withholding to the state of North Carolina. You may not have familiarity with how these things are handled, but a Charlotte CPA is and can handle any one of these situations for you.
Payroll is sometimes simple and sometimes it’s complex. Having a Charlotte, NC, business accountant do your payroll for you is the best way to avoid getting into trouble with the IRS and NCDOR. You get to run your business without the worry of inadvertently doing something wrong.