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Top 7 Tips For the Proper Reporting of Taxable Wages For Your Small Business

By James Agee

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Most small business owners are responsible for reporting and depositing all applicable payroll taxes to both the state and federal government. It is important that all of the documents filed and deposits made are done so in an acurate and timely manner. Filing tax forms with incorrect data is one of the most common ways that business owners incur fines and penalties on their payroll taxes. The following are tips to remember when completing payroll tax documetns that will help eliminate the improper payment of benefits as well as assist in determining which compensation paid to employees are considered taxable wages.

  1. Use the correct social security number for each employee. Make each employee show you his or her social security card when hired.

  2. Report wages when PAID, not when earned.

  3. Respond promptly to any written inquiry for information on former employees.

  4. Respond to telephone calls from the IRS or the state regulatory department seeking your assistance.

  5. All of the following are considered forms of taxable wages--commissions, bonuses and back pay awards, vacation pay,

  6. Severance pay and wages in lieu of notice are considered taxable wages.

  7. Cafeteria Plan" benefits are wages if the IRS criteria for exemption are not met.

James Agee is the Vice President of Absolute Business Service Inc, a division of Absolute Pay Trust. Absolute Pay Trust is a Florida corporation which provdes payroll and commercial insurance solutions to small business owners throughout the state of Florida. If you have have questions about payroll taxes or other related topics you can learn more at http://www.absolutepaytrust.com

Source: http://Top7Business.com/?expert=James_Agee

Article Submitted On: November 29, 2006