Tax season is finally over and employers everywhere are breathing a bit easier. Now that the IRS has been paid, it’s the perfect time to take things easier right? Why sweat the next tax season just yet?
Because the sooner you start implementing sound strategies that will reduce the cost of payroll taxes, the more you’ll save on the next year. If this sounds like something you might be interested in, then here are a few ways you can reduce your payroll taxes for next year!
Independent Contractors.
As an employer, you only have to take care of payroll taxes for your employees. Independent contracts, though, are self-employed. All you have to do is make sure that they’re paid their full amount on time. They have to take care of their tax obligations themselves. That being said, not every position can be filled with an independent contractor. Only consider this option if the opening you have is specialized and requires minimal supervision.
FICA Benefits.
Instead of offering employees a raise, why not offer them benefits that are exempt from FICA withholding instead? If the money is diverted into things like employee insurance programs, you won’t have to pay a payroll tax on it. That being said, partner members of businesses defined as LLCs, sole proprietorships, and employers who own over two percent of an “S” corporation can’t take advantage of this.
Online Payroll Services.
There are several cost benefits of using online payroll systems and one of the biggest ones is their accuracy. All of your payroll tax information is reported timely and precisely, which eliminates the potential of having to pay exorbitant penalties.
These are just a few of the great ways you can reduce payroll taxes. If you hire independent contractors, offer FICA exempt benefits, and use online payroll services, you’ll find the amount owed to the IRS at the end of the year will be substantially less than anticipated. If you have any questions, feel free to ask in the comments. For more, read this link.
