January 31, 2013
Unless the owner handles all aspects of computing and paying payroll, there is room for fraud in every small business. The fact that your company has only a few employees does not guarantee that you will be safe.
Perhaps one of the easiest payroll fraud techniques is the overpayment of withholding or payroll taxes. Your bookkeeper simply overpays the government. When the refund check arrives, it is deposited by the employee to his or her personal account. In some cases, the employee will have an account at a different bank but in the company name. Such an account could be used for the fraudulent deposit of other company receipts as well.
The greater the number of employees, the easier it is to pull off a scam. Perhaps the payroll clerk has invented a fictitious employee or falsifies hours or commissions for a cooperating employee who shares the stolen funds. Or perhaps the employee holds the payroll deposit funds in his or her own interest-bearing account until it is time to make the payroll deposit to the government.
A payroll review by an independent accountant may help prevent such employee schemes. Even in small companies, it is possible to divide office tasks to make employee theft more difficult.
Give us a call; we will gladly review your company’s internal controls to determine what changes may be needed.
October 23, 2012
Keeping costs under control is crucial in today’s challenging business environment. Without a doubt, one of the quickest ways for a business to cut costs is through staff reduction. But cutting jobs is not always the best cost-cutting strategy. Drastic job cuts can lead to a vicious cycle of reduced productivity, followed by even slower growth and decreased profitability. Replacing skilled workers when times improve may be difficult, leaving your company to struggle longer still.
Here are some alternative cost-control strategies that companies could consider.
* Look at the cost of your office or plant. If the company owns expensive office space, consider moving to a less costly location that will not mean losing clients or business. If a move is out of the question, consider sharing office space with a compatible company. What you save in shared operating costs goes directly to the bottom line (after taxes, of course).
* Consider sale-leaseback arrangements, which enable the company to generate funds for operations and transfer the burden of ownership to the buyer from whom you rent back the office space.
* Review the cost of supplies and inventory. Analyze the cost of materials and supplies. Are you stocking too much material too far in advance? Can you arrange to have products shipped directly to customers by your suppliers?
Periodically conduct a competitive review of suppliers, and select those who can deliver good quality and service at the lowest cost possible. Also, you may not have to pay full price; inquire about volume discounts.
* Outsource some processes. Consider outsourcing certain activities that either consume a great deal of time and resources or are prone to errors. For example, you may be able to have payroll processing done by a vendor at a fraction of the current cost to you.
For help in finding the best cost-control strategies for your business, give us a call.
January 25, 2011
If you had a housekeeper, nanny, gardener, or other household worker help out in 2010, you may have payroll tax obligations (commonly called the “nanny tax”). These payroll taxes apply if you paid a household worker $1,700 or more in 2010, and filing requirements must be met by January 31, 2011. For assistance, call our office.
January 11, 2011
It’s time to file various tax returns once again. Among the tax deadlines you may be required to meet in the next few months are the following:
* January 18 – Due date for the fourth quarterly installment of 2010 estimated taxes for individuals unless you file your tax return and pay any taxes due by January 31.
* January 31 – Employers must furnish 2010 W-2 statements to employees. Payers must furnish payees with Form 1099s for various payments made. (The deadline for providing Form 1099B and consolidated statements to customers is February 15.)
* January 31 – Employers must generally file annual federal unemployment (FUTA) tax returns.
* February 28 – Payers must file information returns, such as Form 1099s, with the IRS. This deadline is extended to March 31 for electronic filing.
* February 28 – Employers must send Form W-2 copies to the Social Security Administration. This deadline is extended to March 31 for electronic filing.
* March 1 – Farmers and fishermen who did not make 2010 estimated tax payments must file 2010 tax returns and pay taxes in full.
* April 18 – Individual federal income tax returns for 2010 are due.
November 16, 2010
The IRS and the Treasury are giving employers additional time to adjust payroll systems and procedures to meet the requirement to include the cost of employer-sponsored health coverage on employees’ W-2 forms. This reporting requirement was mandated in the 2010 health care reform legislation and was scheduled to take effect with the issuance of W-2 forms for 2011.
Reporting the cost of coverage will be optional for Forms W-2 issued for 2011. Employers who fail to report the cost of health coverage for their employees will not be subject to penalties. The IRS notice included a reminder that the reporting requirement is for informational purposes only. The amount reported on an employee’s W-2 is not taxable income to the employee.
May 18, 2010
The HIRE Act, passed in March, provided tax incentives for companies to hire unemployed workers. One of these incentives is an exemption from social security payroll taxes for every qualified worker hired after February 3, 2010, and before January 1, 2011.
A new IRS form is now available for employers to document this payroll tax exemption for hiring unemployed workers. Form W-11 (Hiring Incentives to Restore Employment Act Employee Affidavit) is to be filled out by the new hire, certifying under penalty of perjury that he or she was either unemployed or worked fewer than a total of 40 hours during the 60 days prior to taking the current job. The W-11 forms are not filed with the IRS; the employer must retain them along with other payroll records.