Here’s a scary fact: The IRS estimates that 40 percent of small business owners pay an average penalty of $845 a year for filing their taxes late or incorrectly, according to outsourcing company SurePayroll.
There is a way for business owners to avoid the wrath of the IRA, though: payroll outsourcing.
By outsourcing their payroll to an outside company, business owners can dramatically increase their odds that they won’t be paying extra to the IRS each year. And in today’s challenging economy, one that certainly hasn’t been kind to business owners, every dollar saved can make a significant difference.
Many payroll outsourcing companies actually provide a tax guarantee to their small business customers. This means that the payroll outsource companies actually pay any penalties that do result from their own mistakes. Business owners can consider this a type of safety net: They can eliminate those yearly, and costly, penalty notices from the IRS.
It’s true that outsourcing payroll isn’t free. Business owners will have to pay a fee to outsourcing companies to handle this task. But smart business owners will look at this fee as a wise investment in their companies. Thanks to most outsourcing companies’ tax guarantees, business owners might actually pay off this investment in just four to five years. As most business owners understand, that’s quite a quick payoff for a business investment.
To succeed today, small business owners must take advantage of every tool they can find. Payroll outsourcing is just that: One of the most effective tools that business owners can use to increase their own productivity and avoid costly fines from the federal government.
Smart business owners have relied on payroll outsourcing for decades. Not only does it save money in the long run, it also frees up significant time for business owners. Owners who don’t have to worry about handling payroll duties, can instead spend their time concentrating on income-generating tasks such as hiring new employees, adding to their business’ product line and debating the merits of expanding their business’ hours.
