Other People’s Money – Payroll

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When we lived in Maryland, for a short time, my spouse worked in Virginia.  The boss took withholding from his check but did not pay the taxes.  We had to pay more at year-end because we could not prove what happened. We were young and could not afford a lawyer to sue. It was a long time ago, but not forgotten.  That boss stole from my husband, who should have received a refund.

An employer is a trustee of the employee’s money and taxes.  Employers are entrusted with other people’s money.  As someone who does bookkeeping for small businesses, I urge my new clients to use a payroll service.  Can I prepare payroll?  Yes, but will a young entrepeneur understand their responsibility to get taxes paid in full in a timely manner even when cash flow is tight? It is my job to inform them of the best choice for their business to succeed.  In my opinion that is often a payroll service.

Most payroll service fees are very reasonable.  The companies are also flexible in how they work.  The employer may be able to hand-write net checks to get folks paid quickly, but the calculations and withholding are all done for them. A payroll service will do necessary paperwork and debit the withholding on time.  This eliminates any temptation to delay sending taxes, which can get out of control quickly.

Save time, save money, save stress.

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