Keep Your Business Taxes in Top Form

Tax compliance systems help you to stay compliant with complex state and federal regulations, and ensure you meet critical deadlines like tax filings. Manually calculating taxes can not only be time-consuming for the employer due to complex tax regulations, especially if you have employees across state lines. If mistakes are made during manual calculations, there can be fines associated, there can also be fees for missed deadlines. Tax compliance software helps to minimize this risk by automating the process, alerting you of any corrections that need to be made, and alerting you of important deadlines.

Yes, tax and compliance software are automated.

Understand your Business Needs
Understand your unique business needs for tax and compliance. For example, you may have out-of-state employees, or your company may be in an area with complex local codes that are hard to process. The tax compliance software you choose will need to understand how to navigate your unique needs. Also, consider how much support your team may need. You want to choose a provider that can give you as much support as you need. Evaluate your budget

Evaluate Providers
There are many options for tax compliance software providers that all may have similar product offerings, however, there are key factors to evaluate depending on your business needs:

• Location: Tax regulations can be complicated to navigate depending on where your company is located. IF you are in states such as Ohio or Pennsylvania there are local codes to take into consideration. You want to ensure the provider you choose has experience dealing with tax and compliance in your area.
• Company size: Calculating tax withholdings and creating forms can be automatically calculated, you want to ensure the provider you choose has the bandwidth to support both your staff and your employees. The provider you align with should have success with businesses the same size as your business.
• Experience: A provider with experience in handling tax and compliance may be better equipped to handle complex compliance needs.
• Customer reviews: Hear reviews from real customers, customer reviews can be very helpful when evaluating providers because it is real feedback from your peers who have had experience using the product. For tax and compliance, it is helpful to understand how responsive customer support is, especially during important deadlines. It is also helpful to verify how accurate each provider's tax calculations are, this can reduce the need for manual corrections and reduce the chance of error.
• Compare package offerings: Once you understand your business needs you will understand what features you need most for your budget. With so many different options for payroll software packages, add-on features, and stand-alone options, pricing can get very tricky.
• Be sure the software you choose can integrate with any existing products you already have, or you are looking to use for your business. Work with your IT team to ensure the software you choose is compatible with your business. It is recommended that your tax compliance software integrates with your payroll, so the calculations will automatically populate over to your pay run fields.

Choose a provider
Once you have defined your business needs and you have done your research, it is time to decide on what tax and compliance software provider is best for your solution. At this stage, you have all the information you need to make the right decision for your business. If you are unsure about making the final leap, ask questions regarding product demos, free trials, and a money-back guarantee to help you ease your worries.

Trying to navigate state, federal, and local regulations can be tricky and can lead to compliance issues.

Missing important deadlines
There are fines and penalties associated with missing important tax filing deadlines. Failure to pay payroll taxes on time can lead to paying a fine to the IRS that is calculated by how late you are on your payment. Missing deadlines for your payments to employees can result in conflicts with state and federal laws. Employees not receiving their pay on time can also cause employees to have a negative view of their employer.

Important deadlines can include pay runs, 941s, W-2s, 1099, and 1096 forms. Tax and compliance software will typically alert you of upcoming important deadlines within the software, along with sending you reminder notifications.

Incorrect tax calculations
Doing the incorrect deduction for federal, state, social security, and medicare taxes when calculating payroll can lead to the employer paying fines and paying the taxes on behalf of the employees. If you are calculating payroll manually, be sure to check over your calculations to ensure there are no mistakes. Using your tax and compliance software like Greenshades can help you to verify areas of concern easily using built-in compliance checks.

Improper record keeping
According to the EEOC organizations need to hold on to employee files for 1 year. Also, the FLSA states that payroll records must be held by the employer for 3 years, and must keep all records (employee evaluations, wage rates, etc.) for 2 years. It’s important to have a system for holding onto important files. Housing these files in the cloud is a very effective way to stay organized and be able to access the files from any location.

Incorrect employee information
Misclassifying employees, incorrect employee wages, and incorrect personal information for employees can all lead to errors in their paycheck and year-end filing. Employee self-service is a wonderful tool, but it is important to remind employees how important it is to confirm their personal information is correct both during onboarding and if they update their information in the system.

Employers also must be sure to update important information such as raises and changes in position. An employer can choose to maintain control of updating personal information and conducting new employee onboarding, instead of using employee self-service. If an employer chooses to do this, then it is important to confirm with your employees that the information is correct before entering it into the system.

Time and attendance issues
According to the law, employees working overtime must be paid time and a half. Miscalculation of overtime can lead to penalties or backpay to employees, and most importantly employees will receive incorrect pay that can cause them to lose trust in their employer.
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When shopping for tax and compliance software there are some key features to look for to help maintain compliance:
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• Customer service: Depending on your level of expertise, you may need a responsive customer service team to help assist you. It is important that the customer service team has tax and compliance experts that can help you maintain compliance throughout the year, during year-end submission and important deadlines.
• Cloud-based software: There are laws in place for employers to keep employee’s files even after termination. One example is the IRS requires employers to keep W2 and W4 forms for at least 4 years after an employee is terminated.
  
  Housing important documents in the cloud can reduce the need for spreadsheets and paperwork that can be hard to keep track of. You can also keep track of personal employee information in the cloud as well as their payment history. Ask your provider about the security measures put in place to keep employees' information safe.
• Compliance checks: If you are processing payroll in the cloud, then when you add in tax and compliance software many providers add in compliance checks. Calculating payroll taxes can be a complex process and it can be hard to spot errors, having tax and compliance software in place can help you quickly identify areas of opportunity.
• Integration with existing technology: Be sure the tax and compliance software you choose can integrate with your payroll and HR software. By integrating your software, you can check to be sure both your payroll and human resource operations maintain compliance.

Tax and compliance software can be based on a few factors including your employee headcount and the number of states you need coverage in.