Payroll Tax

[Kurly]

Good Mornin Folks:

Was contacted by my nephew, he is in the commercial bldg painting business. He has been paying is people via a 1099-MISC. I have finally convinced him it was wrong, they should be classified as employeees, as they meet all the requirements as employees.

Any suggestions as to what software to use or on-line or what method I might look into? Do any of them have a tickler to alert a person as to when a tax deposit must be made? I have many questions with a minimum of Payroll experience.

He currently has 12 people that should be considered employees. I currently use Medlin Accounting/Payroll for my one employee.

Any and all suggestions will be much appreciated.

Kurly

[BHoffman]

I would refer him to a payroll preparation company unless I was set up to do payroll. I quit preparing payroll a few years ago and feel that decision has added years to my life.

If that isn't an option, then Quickbooks payroll works really well as long as you take the many hours to learn how to set it up and use it correctly. It reminds you when to make the payroll deposits, creates the Fed quarterlies and you can pay extra for the State quarterlies. Does a nice job for the annual stuff, too.

I'd also suggest getting him set up with EFTPS.

[Edsel]

Payroll Prep Companies

... as in ADP and the like...

are overblown in their value (my opinion). The selling of the service purports to handle all your payroll problems.

What they really are, to their credit, is an incredibly effective calculating machine, and a computerized service for payroll tax reports. And I will give them credit where it is due - they are very good at the above and most of them are quite reasonable.

Where the myth comes in: small businesses think this will solve their payroll problems, and then are horrified when employees line up to complain about their paychecks. Even though the payroll service calculates correctly, it is still the employers' duty to submit correct timesheet information, rates, withholding status, names/addresses, etc. Much is the problem with this is a lack of co-ordination with personnel issues, time worked, preferential treatment, etc. There's no way a payroll service is going to put themselves in the middle of these kinds of problems. The typical scenario involves a clerk still having to spend several hours communicating and correcting data between the company and the payroll service.

With the right software, QuikBooks, Peachtree, whatever, this same clerk can input this same information into their own software instead of on a data sheet for the payroll service. Let this software be the huge calculator instead of the payroll service. Kurly, spend some billable time with this client training their clerk, and justify your fee in the savings they would spend engaging ADP or someone else.

[RitaB]

My turn to agree with Edsel

I use Peachtree. To me doing payrolls is about as much fun as going to the dentist, or eating salad, but it helps pay the bills in the summer.

[taxmandan]

Paycycle.com

We use Paycycle and they send tickler email reminders on when deposits, paydays, and reports (941, 940) are due. The online is easy to navigate, and the reminders sure help during the busy season. You can set up the business to enter their information directly and you can check it or you can enter it for them. The cost recently went up if you have only one employer, but other than that we are satisfied with their service. They are now at a similar cost as QB or the others.

I've had too many problems with ADP to ever recommend them, and alot of the banks use ADP. Payroll is a hassle and I prefer not to do it, but it helps pay the bills and is a service we offer to tax clients only.

[Lion]

Payroll

I've heard good things about Medlin.

I use QB and am content.

Late penalties can be 50%, so the beauty of an outside payroll company is the "insurance" that any errors will be on their shoulders -- if you gave them correct info, had enough money in your account, all the usual provisos. And, they save you the time to find your way around the federal and state requirements that apply to your specific business: monthly, quarterly, do I need workers' comp, how do I file W-2s, etc. If his employees come and go or if he works in a second state, an outside payroll company could be worth every penny, especially if he doesn't like to be tied to his computer once/week to run his payroll. Already having an office clerk might make DIY doable for him.

I suggest the clerk should research what's available to her to run payroll, since she'll be the one who has to use it anyway.

[RLymanC]

Payroll

I also use Medlin, simple low cost payroll program that should be excellent for your needs.

One of my favorite saying's to remember is "Keep it Simple"

[janelljo]

I'd use quickbooks. You can pay your payroll taxes immediately after you run payroll through quickbooks using the eftps system. Just post date the tax payment. To get it set up correctly, I'd find a quickbooks pro advisor. It would be worth it in time spent.