Accounting plays an essential role in all businesses. Still, sometimes, small business owners need to comply with the rules and regulations of the accounting standards to sustain day-to-day operations. Accounting, on the other hand, should never be overlooked.
The company should maintain its finances and keep track of all the expenses and future financial shortfalls. Having the appropriate accounting information could save your organization in challenging situations.
Managing Your Receivable Payments and Days
The sales are only sometimes paid in full, so the company must maintain the receivable payments. Business owners do not enjoy maintaining account receivables. When a credit sale occurs, the accountant creates a receivable invoice stating that the customers have to pay the amount on the specified date to clear the outstanding amounts.
Mark the payments as ‘paid’ once the outstanding amount clears. Piling up a large number of invoices makes it more challenging to manage. Customers who aren’t frequently making their payments need to settle as early as possible.
Maintain Your Cash Flows
Cash flows are an essential business element that requires careful handling and management. Poor cash flow management is one of the primary reasons for the failure of failing businesses. The better you comprehend the numbers in front of you, the more likely you are to manage them effectively.
Consider creating a cash flow statement for your weekly and monthly financial evaluations. These statements provide a more comprehensive picture of your organization’s cash movement within (and outside). A cash flow statement essentially tracks the direction of income. It also has a temporal component, allowing you to see payment cycles and seasonal spending.
Keep Track of Your Expenses
The small business owner fails to maintain the expense reports with increased sales. It is crucial to manage all of your expenses as a business owner. Proper expense management can help you lower your costs and increase your profits. Maintaining all the expenses can give you a clear picture of your business.
Keep Your Personal and Business Accounts Separate
It is highly recommended to all business owners to keep their personal and business accounts separate.
It’s simple for you and your accountant or bookkeeper to examine how money flows when you have a separate bank account for business expenses. If you use your account for work, you risk missing out on critical commercial transactions.
As you move forward, keep your business and personal finances separate. Separating bank accounts might entail creating different credit cards and checking accounts for everyone. Ensure that only business accounts are used for business-related expenses when making spending decisions. It’s the same with your account.
Let Professionals Handle Your Taxes
People attempt to save their money by handling their tax filings. Businesses may suffer a significant loss in the long run if they do not hire a professional accountant to handle and prepare tax statements. Business owners might have to pay fines if they fail to adjust any deductions or underpay the bills.
Have Clear-Cut Communication with Your Accountant
When you interact with other experts who manage your books, such as accountants or bookkeepers, the terminology they employ can be bewildering. You must tell them if you don’t comprehend what they’re saying. You are not a financial expert; you are a small business owner. You have no reason to be up to date on the latest banking industry technical jargon.
Considering your accountant and tax advisors as your team members would be best. They should be watching you and providing you with reliable accounting advice.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
The carriages contribute no consequence to the monetary state. They do not help you find a place to live. Automobiles, shortly, might be decaying items that destroy their value after the combination to a significant car expense.
The poor income that exists in our community is a good example. Zero income is when your credit exceeds the total assets, such as a home, property, etc. For example, you might have a mortgage on a property, and your privilege about the house would possibly be intensified in profit, allowing you to enjoy all the benefits when you move.
Consider what one could accomplish with an additional $500 every month. Here is a quick rundown of what comes to mind:
First, make the most of your retirement savings fund.
Second, deposit a new home by putting money aside.
Third, put money down for your kid’s college education.
Pay off your debts!
Loan Modification for the Bank Loan
According to Experian, an increasing percentage of people are at least 60 days behind on their auto charges. An exploration mentioned several factors for the surge, including the flourishing auto industry and the rise in lenders.
Also, having a high automobile mortgage leaves you in danger if you struggle to pay the bills and endure an economic burden. If you delay, the borrower may seize your property, which varies by region.
Thus, a circumstance can harm the business and lifestyle, and it is not worth the danger because it might damage anyone in the short and long run.
One could be eligible for a loan modification of your bank mortgage to lower your rate of return when you already get a loan for your car or need relief to cut costs. It also reduces the payment and assists you in paying back the mortgage faster – presuming you do not extend the mortgage.
Decorative Vehicle
There is no demand for contemplating and approaching anything to the typical car purchase if you require a fancier vehicle on behalf of the business. Instead, get a dependable and valuable second-hand automobile such as Honda or Corolla and save the money you would have spent on a luxury item vehicle.
No, it is not glamorous, yet what you need would be something to get you through awareness from A to B. The charming part is collecting that cash.
Feasible to Break Away
Breaking away from this thinking is feasible, but it will necessitate a shift in your financial attitude. It entails shifting from a mindset that prioritizes having what you genuinely want in the now without jeopardizing your tomorrow to one that prioritizes the moment at the latter’s expense.
To gain freedom from the new engine attitude and the constraints of a high car loan, you can perform the following in practice:
Purchase recycled. Here, there is no mistake about the recycled vehicle. Also, that could protect so many dollars. But, on the other hand, purchasing fresh might be merely senseless when the reduction may bang instantaneously.
The individual might break up until he could produce his dejected expense or additional vehicle. Then, place the investments for the generative savings version. Also, one could make the savings for cash.
Lending Money
Compare interest rates to search for the best deal. A 1% change in your mortgage income can push it over the top of your expenditure. Many claim that lending money and taking out a reduced loan is terrible. That is true, but a mortgage is still a debt.
You need not, under any circumstances, inform the dealership what you can manage to pay each month. They will use whatever may diverge you to lure you toward a more costly vehicle. Put your wallet near your collar rather than assemble the job quickly for them.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Step 1: Choosing Your Financial Advocate: Navigating the Path to Security and Trust
Your advocate can be your spouse, but you should also designate a reserved person since you will be around the same age as you. Your advocate should be able to manage your daily expenses, monitor your investments, file your financial records, and protect you from potential fraud.
Choose someone trustworthy, well-organized, and capable of handling money matters. Steve Vernon, the co-author of the Thinking Ahead Roadmap, told me that having more than one advocate never hurts. If you have two children, you can have one pay the bills, and the other manage your investments. If you do not have children, think of a younger relative or good friend whom you know you can trust.
Step 2: Building Financial Stability
Start by developing a financial inventory that includes your assets and debts. Make a list of all your income, including what you get from Social Security and any pension. Then, list your bills, such as utilities, loan payments, and subscriptions. It is also essential that you list all your passwords and keep them in a safe place. Then try to simplify: do you need all those accounts? Do your advocate a favor and get your finances in order.
Step 3: A Conversation of Trust: Navigating the Future Together
You can start by saying, “Your work ethic and financialacumen have always impressed me, and I hold a great deal of respect for how well you manage your finances. As I plan for the future, I find myself considering the possibility that managing my finances might become challenging at some point. That’s why I wanted to reach out to you and ask if you would be willing to help me navigate this aspect of my life when the time comes.
I want to reassure you that I’m currently doing well, but I believe it’s essential to plan for potential scenarios where someone might need to step in. I understand that this is a significant responsibility, and I want you to take your time to process and consider whether you’d be comfortable taking on such a role. If it comes as a surprise or if you need time to think, feel free to take your time, and we can revisit this conversation whenever you’re ready.”
Step 4: Clarifying Financial Intentions: A Guide to Discussing and Documenting Your Priorities
Once you’ve compiled your financial inventory, engaging in a meaningful conversation with your advocate is the next crucial step. Begin by reviewing the detailed inventory together, ensuring transparency about your assets, debts, income sources, and regular expenses. Articulate what matters most to you, such as continuing contributions to a cherished charity or any other specific financial priorities.
This discussion serves as an opportunity to share your values and expectations regarding your financialfuture. Emphasize what financial aspects are significant and any specific commitments you’d like to maintain. It is highly advisable to document these discussions in writing to solidify this understanding. Creating a comprehensive document ensures clarity and serves as a future reference point for your advocate.
The written record should encapsulate your financial priorities, preferred investment strategies, and any specific wishes related to charitable contributions or other financial commitments. This provides guidance for your advocate and helps maintain alignment with your financial values and goals, ensuring a seamless transition in case they need to step in to manage your finances at any point in the future.
Step 5: Empowering Your Advocate: Navigating Legal Steps for Financial Management
Securing legal authority for your advocate to manage your assets involves completing paperwork known as a “power of attorney for financial matters.” As with the Durable Power of Attorney for Health, financial institutions require this legal documentation to grant access and authorization. In the Thinking Ahead Roadmap, you can find detailed guidance on the process.
It’s important to understand that a power of attorney for financial matters is valid until your death, when the responsibility transitions to your estate administrator or executor. The choice of this individual may or may not align with your chosen advocate, providing flexibility in designating those who will oversee your financial affairs. Taking these legal steps ensures that your advocate has the authority to act on your behalf and manage your assets according to your wishes.
Step 6: Navigating the Transition: Recognizing the Right Time for Financial Support
While the first five steps of the roadmap establish the groundwork for potential scenarios where your advocate may need to step in, recognizing the right time for your defender to act requires a nuanced understanding of critical events. The roadmap provides a comprehensive list of these events, ranging from the overt, such as a diagnosis of dementia, to more subtle indicators, like challenges in bill payment or difficulty managing affairs through technology.
It’s crucial to involve your advocate and others in monitoring for warning signs, particularly those associated with dementia, and acknowledging the difficulty of relinquishing control over financial affairs. Crafting a letter to your defender, specifying the circumstances that signal the appropriate time to assume financial management, can be a proactive step. Keeping a copy of this letter ensures clarity and aligns expectations, fostering a smoother transition when needed. This thoughtful approach empowers your advocate and prioritizes your financial well-being in the face of changing circumstances.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
In July 2021, the Dutch restaurant De Daltons unveiled the world’s most expensive burger, the “Golden Boy,” priced at an astounding $6,400. The burger featured a cutlet made from Japanese beef complemented by the richness of beluga caviar, Alaskan Kamchatka crab, and white truffle, and all sandwiched between a bun adorned with luxurious gold leaf crafted with precision. The culmination of premium ingredients and a meticulous nine-hour preparation process resulted in a culinary masterpiece, highlighting the fusion of harmonized flavors.
Culinary Records and Burger Legacy
After almost nine hours to prepare, the “Golden Boy” surpassed the previous record holder, a $6,677 burger cooked in Oregon in 2011. This burger shattered financial records and stood as a testament to the evolving landscape of extravagant gastronomy, pushing the boundaries of what is considered indulgent.
Truffle-Laden Fries
Beyond burgers, the extravagance extended to Serendipity3‘s $200 truffle-laden fries from New York. The preparation involved a unique process, including blanching potatoes in Dom Perignon with J. LeBlanc French Champagne Ardennes and crafting a truffle oil sauce with organic heavy cream, Swiss raclette cheese, and a touch of flour. The dish was then elevated with grated Crete Senesi Pecorino Tartufello and 23K food-grade gold dust, showcasing a lavish twist on a classic fast-food item.
“Louis XIII”: The Pinnacle of Pizza Indulgence
The world’s most expensive pizza, “Louis XIII,” is prepared in Agropoli. The dough is made with organic Arabic flour sprinkled with hand-milled pink Australian sea salt, Krug Clos Du Mesnil champagne, and brandy. Sturgeon and beluga caviar up to 2 mm in size with a sweet taste and nutty aroma is used to fill. Lobsters are put in the filling of “Louis XIII.” As a complement to pizza, Louis XIII cognac is served.
Gourmet Hot Dog: Marbled Beef and Gold Leaf
Marbled beef is dried from Japanese cows for 60 days to prepare it. A traditional 1-foot (30 cm) brioche bun is toasted and brushed with white truffle oil, organic saffron ketchup, and French mustard. The dried meat is seasoned with black truffles and placed in a bun—topped with onions, caramelized in Dom Perignon champagne and centenary balsamic vinegar. Add cabbage stewed in champagne and mixed with black caviar. In the end, put a pickle and a leaf of gold leaf.
Fast food originated in the United States and has long become a global business, and developing countries are the main directions of its expansion. At the same time, the Russian marketplace has become the object of specific scrutiny for chain pizzas, Burger King, Cinnabon, and others.
Russian Fast-Food Dynamics: Quality Over Abundance
Russians are still noticeably lagging in income from US citizens: the average family income is forty thousand dollars against seven thousand dollars in Russia. In addition, the income tax for everyone is 13%, and most Russians did not buy housing on credit after the massive privatization in the 1990s and, therefore, do not pay mortgages now.
In Russian fast-food establishments, the average check is significantly higher than in the homeland of fast food: 8.92 dollars (almost two hundred and fifty rubles) against six and a half dollars (about one hundred eighty rubles) in the USA.
For example, a giant pizza with all available additives at Papa John’s pizzeria costs fourteen dollars (about three hundred ninety rubles) versus twenty-one dollars (about six hundred rubles) for a similar pizza in Russia.
Market Overview: Moscow’s Unique Position
In 2010, the entire turnover of the Russian restaurant market amounted to 768 billion rubles. At the same time, the turnover of the public catering market in Russia by the end of March 2011 reached 60.9 billion rubles, according to Rosstat. While the share of international chains in the Russian market is 18.3%, about 30 global chains manage 1170 public catering outlets.
At the same time, according to the given values for the first quarter, more than a third of all chain catering outlets (41.1%) are concentrated in Moscow, and another 15% of chain restaurants, cafes, bars, and street kiosks are in St. Petersburg.
The capital’s fast-food market cannot be called oversaturated: Moscow, with its 13 million population, has only three hundred pizza shops – for comparison, which have a population in Manhattan, with a population of one and a half million, has four thousand plus restaurants.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Payroll tax essentials include the fundamental knowledge and processes business owners need to properly calculate, withhold, deposit, and report employment taxes while maintaining full compliance with federal, state, and local regulations. These requirements encompass FICA taxes, unemployment taxes, income tax withholding, filing deadlines, and penalty avoidance strategies that protect businesses from costly violations.
Having guided over 500 businesses through payroll complexities during my 20+ years as CEO of Complete Controller, I’ve witnessed firsthand how seemingly minor payroll tax mistakes can trigger devastating cash flow problems and expensive audits. Research shows that 40% of small businesses pay an average of $845 yearly in IRS penalties due to mismanaged payroll, with the current underpayment penalty rate at 8% – the highest in 17 years. This article equips you with the strategic knowledge to navigate 2025’s significant changes, including the Social Security wage base increase to $176,100, while building systems that transform payroll tax management from a compliance burden into a competitive advantage.
What are payroll tax essentials, and why do business owners need to master them?
Payroll tax essentials are the core knowledge and systems required to manage employment tax obligations accurately and compliantly
They include calculating FICA taxes (15.3% total), federal unemployment taxes (FUTA), and proper income tax withholding based on employee W-4s
Business owners must understand filing schedules, deposit requirements, and maintain records for at least four years per IRS requirements
Mastering these essentials prevents penalties ranging from hundreds to thousands of dollars and protects against IRS audits
Proper payroll tax management creates employee trust, regulatory compliance, and sustainable business operations
Understanding Core Payroll Tax Components and Your Legal Obligations
Every business owner must grasp the fundamental structure of payroll taxes before implementing any system. Payroll tax regulations require employers to handle multiple tax types simultaneously, each with distinct rates, wage bases, and compliance requirements that change annually.
The foundation starts with Federal Insurance Contributions Act (FICA) taxes, which fund Social Security and Medicare programs. For 2025, the combined rate remains 15.3% of gross wages, split equally between employer and employee at 7.65% each. The Social Security portion (12.4% combined) only applies to wages up to $176,100, representing a significant increase from 2024’s $168,600 limit. Medicare taxes (2.9% combined) have no wage cap, and high earners face an additional 0.9% Medicare tax on individual earnings exceeding $200,000.
Essential payroll tax information every employer must track
Beyond FICA, employers face Federal Unemployment Tax Act (FUTA) obligations of 6.0% on the first $7,000 of each employee’s annual wages. Most states offer a credit reducing this to 0.6% when state unemployment taxes are paid timely and the state maintains good standing.
Understanding payroll taxes for small businesses means recognizing dramatic state requirement variations. Texas imposes no state income tax while California enforces complex withholding calculations. Employee classification represents another critical component – the IRS scrutinizes distinctions between employees and independent contractors, as misclassification results in retroactive tax liability plus penalties.
Calculating Payroll Taxes Accurately: Rates, Formulas, and 2025 Updates
Payroll tax rates for 2025 include several adjustments directly impacting calculations and compliance strategies. The Social Security taxable wage base increase to $176,100 means higher-paid employees see increased withholding throughout more of the year, affecting cash flow planning for both employers and employees.
The calculation process begins with determining gross taxable wages:
Salary and hourly pay
Overtime compensation
Bonuses and commissions
Value of certain fringe benefits
Pre-tax deductions for health insurance, retirement contributions, and qualified benefits reduce the taxable base for FICA and federal income tax calculations. Some deductions that reduce income tax withholding may not affect FICA calculations, creating processing complexity.
Payroll tax deductions and pre-tax benefits management
Payroll tax deductions fall into two categories: mandatory withholdings and voluntary pre-tax elections. Mandatory withholdings include:
FICA taxes (7.65% each for employer and employee)
Federal income tax based on W-4 elections
State income tax where applicable
Voluntary pre-tax deductions encompass health insurance premiums, retirement plan contributions up to annual limits ($23,500 for 401(k) plans in 2025), and flexible spending account elections. The IRS updated 2025 withholding tables include adjusted standard deduction amounts: $30,000 for married couples filing jointly, $15,000 for single filers, and $22,500 for head of household status.
Payroll Tax Compliance: Filing Requirements and Critical Deadlines
Payroll tax compliance extends beyond accurate calculations to encompass reporting requirements, deposit schedules, and documentation standards varying by business size and structure. The IRS determines deposit frequency through a lookback period examining taxes reported during a four-quarter period ending June 30 of the prior year.
Monthly depositors must remit payroll taxes by the 15th day of the following month. Semi-weekly depositors face Wednesday deposits for Saturday through Tuesday paydays and Friday deposits for Wednesday through Friday paydays. Businesses with annual payroll tax liability under $2,500 may qualify for quarterly deposit schedules, but growth can trigger more frequent requirements.
Payroll tax filing requirements for different business structures
Payroll tax filing requirements for freelancers and small businesses center around Form 941 for quarterly reporting of income taxes and FICA taxes. This form reconciles deposit activity with actual wage payments and tax calculations, serving as the foundation for IRS compliance verification.
Annual Form 940 reports FUTA taxes and determines credit eligibility for state unemployment tax payments. State and local requirements layer additional reporting obligations onto federal schedules. Some jurisdictions require monthly wage reports independent of tax deposits, while others integrate reporting with payment processing. Multi-state employers track different requirements across jurisdictions, particularly for employees working in multiple states.
Strategic Payroll Tax Planning and Penalty Prevention
Payroll tax strategies for accurate reporting begin with establishing robust systems before hiring your first employee. Statistics reveal that 33% of employers make payroll errors, with almost half of small businesses receiving annual fines for late or missed payments. The trust fund recovery penalty (TFRP) holds responsible parties personally liable for unpaid payroll taxes, extending beyond business assets to individual property.
Consider the case of Melissa Metts Johnson, a Savannah restaurant owner sentenced to 18 months in federal prison and ordered to pay $428,203 in restitution for failing to remit payroll taxes from 2015-2019. Despite withholding taxes from employee paychecks, she kept the money for personal use, demonstrating how violations escalate from civil penalties to criminal prosecution.
Payroll tax tips for employers: Technology and automation solutions
Modern payroll tax tips for employers emphasize leveraging technology to reduce manual errors. Cloud-based payroll systems automatically update tax rates, calculate withholdings, and generate required reports while maintaining detailed audit trails. These systems typically integrate with:
Accounting software
Time tracking platforms
Benefits administration tools
Full-service providers handle all aspects of payroll tax compliance, from calculations through filing and payment processing. They provide tax penalty protection and representation during IRS inquiries, offering peace of mind for business owners focusing on core operations.
Record Keeping Requirements and Audit Preparation
Payroll tax obligations include maintaining comprehensive records supporting tax calculations and filing positions. The IRS requires retention of employment tax records for four years after the tax becomes due or is paid, whichever occurs later. These records must include employee information, wage details, tax calculations, and copies of all filed returns.
Digital storage solutions offer advantages in organization, accessibility, and disaster recovery compared to paper-based systems. Cloud storage with proper backup procedures maintains record availability during audits while protecting against data loss from hardware failures or natural disasters.
Case study: Midwest manufacturing company’s payroll tax compliance transformation
A mid-sized Ohio manufacturing company with 150 employees across multiple shifts faced significant challenges when rapid growth overwhelmed manual processes. After receiving a $15,000 penalty for late deposits, management implemented automated systems establishing internal controls that eliminated compliance issues while reducing processing time by 75%.
The transformation included employee self-service portals for W-4 updates, automated integration with time clock systems, and real-time reporting dashboards. Within six months, the company achieved consistent on-time deposits, eliminated calculation errors, and freed administrative staff for strategic initiatives.
Managing Payroll Tax Challenges for Growing Businesses
Essential payroll tax information for scaling businesses includes understanding how growth impacts compliance obligations and system requirements. Research shows smaller companies with fewer than 50 employees spend $1,900 per employee on tax compliance – 90% higher than businesses with 100+ employees that spend $1,000 per employee.
Multi-state operations introduce complexity many businesses underestimate during expansion planning. Each state maintains unique requirements for registration, withholding, reporting, and payment processing. Interstate commerce and remote work arrangements complicate state tax obligations, particularly for businesses with employees working from multiple locations.
Conclusion
Mastering payroll tax essentials protects your business from costly penalties while establishing the foundation for sustainable growth and employee satisfaction. Academic research reveals payroll taxes have become the leading growth tax on small businesses, with most companies paying more in payroll taxes than any other form of tax. When faced with increases, businesses typically raise prices rather than reduce wages, showing how these costs ultimately impact competitiveness.
As someone who has guided hundreds of businesses through payroll tax challenges over two decades, I’ve seen proper systems transform administrative burdens into competitive advantages through improved accuracy, efficiency, and compliance confidence. The investment in mastering these essentials pays dividends through penalty prevention and operational excellence.
For expert guidance in implementing robust payroll tax systems and maintaining ongoing compliance, visit Complete Controller to learn how our team can transform your payroll tax management from a compliance challenge into a strategic business advantage.
Frequently Asked Questions About Payroll Tax Essentials
What are the basic payroll taxes every business owner must understand?
Business owners must understand FICA taxes (Social Security and Medicare totaling 15.3%), federal income tax withholding, Federal Unemployment Tax (FUTA), and applicable state and local taxes. Each has different rates, wage bases, and compliance requirements.
How often do I need to deposit payroll taxes with the IRS?
Deposit frequency depends on your lookback period tax liability. Most new businesses start as monthly depositors (due by the 15th of the following month), while larger employers may be semi-weekly depositors with specific Wednesday and Friday deadlines.
What happens if I make a payroll tax mistake or miss a deadline?
Penalties vary based on the type and timing of the error. Late deposit penalties start at 2% for deposits 1-5 days late and increase to 15% for deposits over 16 days late. The Trust Fund Recovery Penalty can make responsible parties personally liable for unpaid taxes.
Do I need to withhold payroll taxes from independent contractors?
No, independent contractors are responsible for their own taxes and receive 1099-NEC forms for annual reporting. However, misclassifying employees as contractors can result in significant penalties and retroactive tax liability.
How long must I keep payroll tax records?
The IRS requires keeping employment tax records for four years after the tax becomes due or is paid, whichever is later. The EEOC requires three years for most payroll records, with some exceptions requiring longer retention periods.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Jennifer BrazerFounder/CEO
Jennifer is the author of From Cubicle to Cloud and Founder/CEO of Complete Controller, a pioneering financial services firm that helps entrepreneurs break free of traditional constraints and scale their businesses to new heights.
Brittany McMillen is a seasoned Marketing Manager with a sharp eye for strategy and storytelling. With a background in digital marketing, brand development, and customer engagement, she brings a results-driven mindset to every project. Brittany specializes in crafting compelling content and optimizing user experiences that convert. When she’s not reviewing content, she’s exploring the latest marketing trends or championing small business success.
Within a few years, artificial intelligence has gone from a clunky, half-baked technology many wrote off as a fad to an industry standard for many businesses to leverage. Here are a few ways companies are using artificial intelligence in 2024 and moving towards the future.
Automation
Automation has always been about using technology to do what man can’t, and this has never been truer than the advent of artificial intelligence. AI doesn’t just perform tasks faster and more efficiently than humans; unlike the old machines, it learns as it goes. This form of machine learning makes AI a valuable asset for companies that are set to appreciate in the long term rather than depreciate.
Nasa was one of the first major companies to embrace AI automation and one of the most successful. Their accounting, IT, and HR departments are now optimized thanks to artificial intelligence, with 86% percent of transactions across these three departments taking place without human intervention.
Cognitive Insight
Data collection has always been one of the industry’s most critical and resource-hungry practices. Artificial intelligence can perform data collection faster and more effectively than any computation technology that came before it.
AI opens up new possibilities for business growth and innovation by analyzing data more deeply than some ever thought possible and finding new profitability and business optimization methods than human data analysts ever could.
In an era where marketing, advertising, and communication are moving farther and farther toward digitalization, artificial intelligence isn’t just a fancy perk but a necessity. This is the only technology, and certainly no human, that can perform the computation and data crunching required in modern industries. If businesses hope to survive in the modern economy in the future, they have to embrace AI, at least to some capacity.
Cognitive Engagement
Cognitive Engagement refers to the use of AI in communication. As internet speeds get faster and broadband technologies like 5G become commonplace, we need systems that can allow us to communicate with each other quickly and consistently.
In modern society, people like to stay connected at all times, and such communication is vital for business. Various communication methods between firms, customers, and other industry partners leverage AI.
One typical example of such technology is AI chatbots. AI chatbots have revolutionized the customer service experience. They can solve customers’ problems faster than the average human. Still, they also learn over time, allowing them to develop new and better solutions and adapt to new issues that customers may face.
E-commerce
It may seem like a long way away, but cryptocurrency will permanently replace paper money one day. It isn’t just a baseless conspiracy anymore, and it’ll happen sooner than we all think.
The market is already preparing for the day it happens. Still, when it does, artificial intelligence will be a necessary means of calculating complex data processes across millions of virtual transactions worldwide at any given time. Banks and other finance-based businesses are already taking the first step toward this brave new world becoming our eventual reality.
Examples of Companies Using Artificial Intelligence Today
Many companies already leverage AI’s power in their products and end-to-end processes.
Of course, the most famous is Tesla, whose cars feature self-driving AI and are manufactured using AI-powered robotics.
Speaking of robotics, Hanson Robotics uses AI to create its state-of-the-art ‘social learning’ robots. Hanson Robotics believes their robots could eventually replace on-screen actors and social media personalities.
Pathai specializes in producing new technology solutions for pathologists using AI. Their products aim to help pathologists diagnose accurately and provide better treatment options.
Pager is another player in the medical industry. They use machine learning to deduce every client’s best possible healthcare option. Their AI platform also makes medical appointments and carries out payments.
Conclusion
For years now, skeptics have parroted the fear that AI will cause an economic collapse due to mass redundancies and layoffs, but as markets worldwide have embraced innovation, this has proven far from the truth. Artificial intelligence is creating new jobs every day, jobs with more market value than those made obsolete. Thanks to AI, the future of the global economy is looking brighter than ever.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
A chart of accounts is created in a business’s general ledger to record all the financial transactions and balances. The chart of accounts acts as an index and lists every account in the general ledger in subcategories.
A chart of accounts is used to organize all the financial balances to make it easier for bookkeeping and for stakeholders to better look at the finances. The chart of accounts index is created to categorize each account differently by giving them a name and a brief description of the category.
Most of the time, the categories are also given an identification code to locate the accounts quickly. For startups or small businesses, the chart of accounts is a foundation for all the bookkeeping and double-entry systems.
For small businesses, including many different accounts in the chart of accounts is not essential as it will complicate and confuse things. A chart of accounts helps a bookkeeper identify what account to perform the transaction in.
A small business chart of accounts mainly consists of five major categories. The main types of accounts a chart of accounts include are Revenue, Expenses, Assets, Liabilities, and Equity.
Revenue: As the income statement already includes the revenue, the revenue account in the charts of accounts is almost the same as the income statement. The revenue account keeps track of all the incomes the business earns, such as sales, rent receivable, or other charges for your services.
This account will help you determine the errors performed while bookkeeping and will identify the difference in balances. The revenue account also includes the cost of sales, and it is essential to remember to include this in your revenue accounts. It will consist of the discounts the suppliers offer you, along with the transportation costs you charge or the ones charged to you.
Expenses: The expenses account in the chart of accounts includes all the expenditures you perform in your organization to generate sales, such as wages and salaries, utilities, and rent. An easy and efficient way to record your expenses is by using the IRS’s Internal Revenue Service tax form, readily available online.
The Internalnalnue service tax forms report financial information to the Internal Revenue Service. This form is efficient as it can be used for two purposes: filing taxes and recording expenses in the chart of accounts.
Assets: The assets account in the chart of accounts is listed below the balance sheet accounts. This is called a balance sheet account, as assets are essential while creating a balance sheet. Assets are valuables a business has that are used in the process of generating revenue for the business. Land and buildings, Equipment, Inventory, and Cash are a few examples of assets.
Liabilities: Liabilities are also listed below the balance sheet accounts. Liabilities are debts that go to another party, which can be in the property or any equipment. Examples of liabilities are loans from banks, trade payables, and mortgages.
Equity: Equity or capital is the difference between the aa businesses and the liabilities, representing the leftover funds in the business after the liabilities have been subtracted from the assets. The equity includes all the investments made in the business. For a sole trader, the capital they invest in the business is called Equitequityity and identifies its value after all the calculations are made.
The chart of accounts helps separate the major accounts into different categories to help you have a better look at the financial situation. You can identify what part of your accounts needs more attention and improvement and work on it specifically.
It gives you an idea of what is going on in your business. You can provide the information from the charts of accounts to your stakeholders, especially potential investors or shareholders. The chart of accounts can also be used in the decision-making process. The accounts mentioned above are the major and the most important accounts to include in your chart of accounts index.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
You cannot have too many tools to ensure you get the best rates and financial deals regarding finances and accounting. Several tools and financial calculators will determine loan payments, interest, debt tolerance, and many other financial calculations you need to make sound financial decisions. Here are eight financial tools and calculators and how they work.
Loan Calculators
The operation of loan calculators is similar whether it is mortgages or not. Remember that the differences between a personal loan or consumer and a mortgage are that the amounts are higher in the mortgage, and the guarantee offered by the borrower is the home acquired.
Within the loan calculators, there are several utilities:
Debt Capacity Calculator
It indicates the maximum amount to request according to our current financial situation (incomes and balances already committed, such as existing debts, fixed expenses, etc.) since the foremost indebtedness credit institutions allow is usually 35-40% of our monthly net income.
Here, it will be easy to calculate the monthly installments, as the interest will remain fixed throughout the life of the loan. Knowing the amount requested, the fixed interest, and the number of years to return it, we will know the installments (monthly, quarterly, semi-annual, etc., as the case may be) fixed until the end of the loan.
For Variable Interest Loans
This calculator is much more complex than the previous one, and its results are not exact because it is an estimate in which we predict how interest rates will vary.
The necessary data are capital granted, term, initial interest, rate of variation of that interest, periodicity of the installments, periodicity of the type reviews, and reference index (EURIBOR normally).
In any case, these calculators are handy for comparing loans since variable data, such as the interest rate, will be the same at the time of comparison.
Financial Tables to Calculate Quotas
These are tables in which various types of interest appear in a column, and in rows, the possible terms of the loan so that the different monthly installments to be paid can be cross-checked (for example, for every 1000 euros of the loan). So we can have a rough idea of the fees we will deliver.
Therefore, the loan calculators help us know what maximum amount they will grant us, what fees we will pay in the future, and most importantly, they help us compare different options.
Pension Plan Calculators
We can estimate the total amount of the pension plan at the end of its term, knowing the annual contribution, the increase that we will make of that yearly contribution each year, and the term of the plan, always bearing in mind that it is an estimate as the profitability varies annually.
In addition, many of these pension plan calculators also indicate the expected annual fiscal savings according to the taxable base in the IRPF of the person making the calculation.
Investment Calculators
As in mortgages, we will distinguish the investments with known and safe returns from investments with variable and uncertain returns to calculate the returns on investment.
Investments with Safe Performance
For safe yields (bonds, fixed-rate deposits, etc.), knowing the amount to be invested, the type, and the term to obtain the annual, monthly, etc. yields will be enough.
Investments with Variable Yield
The calculators are meaningless for uncertain investments (stock market, mutual fund, currency market, etc.). Known as the past phrase, profitability does not presuppose future returns, and we can only calculate the gains or losses already incurred.
There are indeed mixed investment funds, which combine investments with certain returns and other equities, guaranteeing (except colossal economic collapse and massive bankruptcies) yields in a possible range. We can then calculate the different profitability of these mixed products as the variable income part evolves.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
Startup businesses usually start with high costs limited revenue, and fail to enter the market correctly. Many startup businesses struggle to form an image and a reputation along with their brand name. For small business owners who are always trying to cut down their costs and expenses, it is hard to pay taxes, especially if they are already in tax debt. Businesses must pay taxes to the government as the government needs funds and resources to increase economic growth.
The five types of significant business taxes are gross receipts, corporate franchise, employment withholding, excise, and value-added taxes (VAT). Businesses pay income, property, and sales taxes, but these aren’t explicitly considered business taxes. All types of small businesses have to pay 19.8% of the average tax rate. Small businesses with one owner pay an average 13.3% tax rate, and those with more than one owner pay 23.6%. New companies have higher costs than old businesses because of the startup costs incurred to make the business functional.
In contrast, stable businesses are already operational; hence, they don’t require as many operational costs as startups. And to top all of it, the IRS releases new business tax laws almost every year, which gets quite challenging for new businesses to handle. New or small companies sometimes fail to pay their taxes on time, face late fees or penalties, and are put on faulty taxpayer lists. Many small business owners work hard to achieve their profits, only to pay a significant portion in taxes.
Tax season is always hectic for business owners as you have to be very careful of the tax calculations and ensure you are not overpaying your taxes. For new business owners, it can be hectic and confusing at the same time as they probably have no idea how to file taxes and what the requirements of the IRS for tax-paying are.
Here’s what you would need at the time of paying tax:
Old tax records from previous years. (If this is your first year operating, skip this step.)
Bank statements, credit card statements, and other bank-related documents
Payroll documents
Partnership agreements (if you are not a sole trader)
Financial statements and documents such as Income Statement, Balance Sheet, and Cash Flow Statement
How to Calculate and Pay the Taxes?
If you are running a small business, the chances are that you will have to pay taxes every three months. Quarterly tax payments are allowed for small companies, as paying a large sum of tax at the end of the year can be challenging for small businesses. Delivering payments four times a year can also be beneficial as your business can avoid penalties, and you can maintain the cash flows of your business.
To calculate your business’s quarterly tax, you have to evaluate your business’s gross income, taxable income, deductions, and credit. The IRS also provides new companies with an estimated tax worksheet if they do not file their taxes.
Another way you can calculate your taxes is by dividing the income tax expenses by the earnings (or income earned) before taxes and then further dividing it by four.
You can pay your taxes by filling out Form 1040 ES, and then you can mail a check or pay online using the IRS payment site. For big corporations, the Electronic Federal Tax Payment System is the way to pay taxes.
There are employee-related taxes that a business has to pay, too. To pay those taxes, you will have to fill out Form 940. You are also required to calculate each employee’s share of Medicare and Social Security taxes, along with filing Form 941 and matching each of their contributions.
The four standard dates to pay the taxes are the 15th of four months- January, April, June, and September. You can also find tax deductions over vehicles, contract labor, depreciation, wages, supplies, and operational costs.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
First, let’s ask ourselves, can we be sure what the future holds when none of us thought that we’d spend an entire year indoors? But one thing that the pandemic taught us is that there is more than one way to do anything. People thought businesses would close due to lockdowns, but the concept of remote working stepped up. Such was the year; it brought new developments and sparked discussions that were buried.
Similar is the case for investing in international businesses. Looking statistically, stocks are poised to perform better in the new year. Remember, the economic development in response to the pandemic is also going strong. But before you try to invest internationally, let’s elaborate on where you can start investing.
Vietnam and Cambodia
Vietnam and Cambodia are unarguably the best Asian countries to invest in, especially in 2023. Let’s look at it this way. They completely averted the crises that were in the form of a pandemic. In fact, according to studies, they were able to achieve GDP growth in 2020, when most countries bore the brunt of a global economic crisis.
On top of that, by separating from China, they could expand their horizons on the business forefront. They are better positioned to play their part in world trade’s restructuring. And this is not due to COVID-19 but because China is in a trade war against the United States. According to Forbes, out of $31 billion in exports taken away from China, about 46% is taken by Vietnam. They also exported an excess of $14 billion worth of goods to the U.S., the prospects look bright!
The Philippines
The Philippines isn’t far behind, either! Before the pandemic struck us, the Philippines was doing better than most, with over 6% yearly growth. Currently, the IMF is forecasting that there will be an 8% contraction this year. How did that happen? The remittances accounted for 10% of the nation’s overall GDP. In other words, over a tenth of its economy is linked to the economic stability of over 10 million Filipino diasporas worldwide.
Another prospect is that about 80% of these remittances come from seven countries: Japan, the USA, Saudi Arabia, UAE, Canada, UK, and Singapore. So, remittances dry up when recession enters the pinnacle of its powers. And what makes this a good investment because you can get good deals at outstanding prices. So, who doesn’t like a good deal?
Japan
If we’re honest, Japan is a comparatively weaker choice than others on the list. The reason is that their economic growth was not that impressive even before the pandemic. Their GDP increased by 0.3% in 2018 and 0.7% in 2019. And after COVID-19 came into the frame, they dropped by almost 5% this year. According to the IMF, Japan’s GDP is expected to grow 2.3% in the coming year if the situation improves.
Do you want to know why Japan is on the list? They are expected to boost their economy with the 2021 Tokyo Olympics. The economic boost is quite specific with international travel normalizing virtually every day. But let’s not forget that this year’s Olympics is being held behind closed doors. On top of that, the delegation arriving will also be reduced in numbers. So, it’s a gamble, but if you want to invest, you must take risks!
Final Verdict
Investing internationally has usually been risky if we look back a few decades ago. But now, it’s one of the premier sources of earning. From joint ventures to long-distance partnerships, international investment is growing consistently. But investing now can be a gamble with the pandemic still hanging around.
But why not take that gamble? Especially after the development of vaccines and precautionary measures being taken by health experts. We are currently witnessing a restarting point, and we could be cash into what promises to be the revolution of the 21st century.
On top of that, people are looking to make the most out of this situation. So, if we can capitalize on this, we could unearth the mysteries of doing business, which was laid to rest by the traditional approach.
About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
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About Complete Controller® – America’s Bookkeeping Experts Complete Controller is the Nation’s Leader in virtual bookkeeping, providing service to businesses and households alike. Utilizing Complete Controller’s technology, clients gain access to a cloud platform where their QuickBooks™️ file, critical financial documents, and back-office tools are hosted in an efficient SSO environment. Complete Controller’s team of certified US-based accounting professionals provide bookkeeping, record storage, performance reporting, and controller services including training, cash-flow management, budgeting and forecasting, process and controls advisement, and bill-pay. With flat-rate service plans, Complete Controller is the most cost-effective expert accounting solution for business, family-office, trusts, and households of any size or complexity.
