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PAYROLL

FULL-CYCLE PAYROLL PROCESSING

We handle the entire complexity of payroll calculation so you can focus on managing your team.

  • Calculation Accuracy: Automated calculation of salaries, bonuses, and withholdings in compliance with current legislation.

  • Tax Compliance: We calculate and remit federal taxes, as well as state taxes (FICA, FUTA, SUTA).

  • Turnkey Reporting: Preparation and timely filing of quarterly (Form 941) and annual (Form 940) returns.

  • Direct Deposits: Fast and secure payroll payments directly to employees’ bank accounts.

ADMINISTRATION AND SUPPORT

Personnel management requires perfect documentation. We ensure transparency and legal integrity for your payroll.

  • W-2 and 1099 Forms: Preparation and distribution of year-end tax forms for your employees and independent contractors.

  • New Hire Onboarding: Registration with tax authorities and completion of required forms (W-4, I-9).

  • S-Corp Consultation: Helping S-Corporation owners determine a “Reasonable Salary” to minimize tax risks.

  • Audit Protection: Full data archiving for 4 years, as required by the IRS, to ensure smooth audits.

What are the main taxes withheld from payroll?

Employers are required to withhold and remit the following taxes:

  • FICA (Federal Insurance Contributions Act): Includes Social Security and Medicare taxes.

  • Federal Income Tax: Federal income tax withholding based on the employee’s Form W-4.

  • FUTA & SUTA: Unemployment taxes (federal and state levels).

  • State/Local Income Tax: State or local income taxes (depending on the business location).

What is the difference between an employee (W-2) and a contractor (1099)?

This is a critical issue for the IRS:

  • W-2 (Employee): You control when, where, and how the work is performed. You are responsible for withholding taxes and providing benefits.

  • 1099 (Independent Contractor): The contractor controls the work process and pays their own taxes.

  • Risk: Misclassification can lead to significant penalties and back-tax liabilities.

What tax forms need to be filed with the IRS and when?

Key forms include:

  • Form 941: Employer’s Quarterly Federal Tax Return.

  • Form 940: Employer’s Annual Federal Unemployment (FUTA) Tax Return.

  • Forms W-2 and W-3: Annual reports that must be provided to employees and sent to the Social Security Administration by January 31st.

Does an S-Corp owner need to pay themselves an official salary?

Yes, this is a mandatory IRS requirement. If an S-Corporation owner actively participates in the business and provides services, they must receive a “Reasonable Salary”.

Key Highlights:

  • Reasonable Salary: The salary must meet market standards for your position and responsibilities. You cannot simply withdraw all profits as dividends.

  • Tax Savings: The main benefit of an S-Corp is that FICA taxes (Social Security and Medicare) only apply to your salary, not distributed profits. However, if the salary is unreasonably low, the IRS may reclassify dividends as salary and assess taxes and penalties.

  • Form W-2: Since you are both an owner and an employee, you must issue yourself a Form W-2 at the end of the year.

  • Employer Taxes: The company must withhold income tax and pay its share of payroll taxes on your salary.