Payroll: Are You in Compliance?
This is a word that brings up all kinds of emotions.
Often it is one of concern, wondering if you are in compliance or not, and if not what are the consequences.
The place I find most people struggle with compliance is payroll.
Payroll has a lot of rules…
1. What you have to pay for
2. When you have to pay it
3. Required reporting that goes with it
Failure to follow the rules does result in penalties and interest.
When you have employees, then payroll is a requirement… but what if you are the only employee?
If you are a sole proprietor or a single member LLC, then you may be taking draws from your company, not actually doing a formal payroll.
So how do you know if you owe taxes or not?
The net income number of your Profit & Loss report is the amount of income you will pay tax on.
If you are an S Corporation, then payroll is a requirement, even if it is just you!
This means that even if you only take one paycheck per quarter or year, you still must file quarterly reporting!
In an S Corp, you must pay yourself a “reasonable salary” to be in compliance.
What is reasonable can vary depending on your industry, and your company’s financial situation.
When is it good to begin payroll?
It depends! Your numbers will tell the story.
If you are wondering if it’s time for you or not or if you are in compliance or not let’s talk!
You can take the Financial Ease Quiz as your first step. When you take this quiz, you will discover:
1. Where you are on track toward Financial Ease.
2. What areas you need to focus on to create Financial Ease.