Payroll Services for Retirement Planning
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You've got energy, enthusiasm, leadership experience and a great product or service. Unfortunately, we're all not number-crunching machines. For many new businesses, taxes, payroll and retirement planning can make or break the company. Your responsibilities as a new business owner include: calculating salary earnings with proper tax and retirement withholdings, keeping track of your payroll data, preparing tax returns and reporting to local, state and federal tax agencies. Accountants, payroll services and payroll software can all assist you. Read on to avoid some common pitfalls and select the best option to keep your business afloat.
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New businesses are advised to "Hire an accountant," which is very sound advice if you're looking for peace of mind. A salaried accountant could provide tremendous payroll services but could also set you back $50,000-$80,000 annually, which isn't feasible for smaller companies. Sometimes your best bet is to hire a consultant for $100-200/month to cover book keeping. Ask around to find a personal accountant who is reliable. The last thing you want is late tax returns or penalties due to an accounting error. You can hire a company like H&R Block to cover your tax filings, but they won't be able to provide you with retirement planning services.
You may opt to outsource all of your financial accounting and retirement planning. This is good for larger businesses with complex payroll and tax information. Paychex and ADP are two popular payroll service providers. Paychex 401k plans and services have gotten mixed reviews. According to Plansponsor Magazine, Paychex ranks #1 among 401k record keepers, maintaining a total of 543,000 payroll clients across the US.
They've also been rated among the top 100 companies to work for in 2007. On the contrary, since Paychex bought out Advantage Payroll Services in 2002, Epinions.com users have reported high levels of incompetency among staff, false promises, hefty penalties, late deposits and declining customer service. ADP has a slightly higher consumer rating and is recommended for medium-sized businesses.
Quickbooks Assisted Payroll costs half the amount of payroll services, around $59/month on average. Instead of waiting by the phone or fax machine, you can enter data into your computer immediately and have information updated in real time. You may choose to print your own paychecks or directly deposit funds into employee bank accounts.
Similar to outsourcing, Quickbooks will cover state and federal tax filings as well, taking a huge load off your shoulders. With just the click of a mouse button, you can have W2's printed right in the office. With Quickbooks or other payroll software, you will have maximum control over your financial pay-outs so you can feel comfortable knowing all your employees and tax agencies will be satisfied. To help with your retirement planning needs, Quickbooks Retirement Solutions is easy-to-navigate software with clear-cut employee retirement plan options.
Before you choose which retirement planning and payroll services you want, be sure to ask yourself the following questions: How much personal time am I willing to put in? Which is more valuable to me, money or time? Would I like to oversee someone in my office or outsource a consultant? When first getting started, it may be advantageous to get to know payroll software and as your business expands, choose whether or not a payroll service is for you.
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Today's Tip On Retirement Planning
One in five small businesses now offer an employee retirement plan. While building business and contemplating your own retirement, you may wonder: Should your business be one of them? Many owners fear an employee retirement plan will lead to large losses amid a shifting economic landscape. However, when retirement planning, you may want to consider a Simplified Employer Pension IRA. The SEP-IRA offers much higher contribution limits (up to 15% of an employee's annual income), gives employers a choice on how much money will be contributed to the general employee distribution annually (depending on how well the company does), and an easy administration process. A SEP-IRA is very similar to a 401k plan, but has lower contribution limits, easier administration and is generally a less expensive option for smaller businesses. Three potential drawbacks to consider are that: employees can't contribute directly (you're making the contribution in the employee's name), qualifying employees include anyone 21 and older with an annual income of $400 or more (part-timers included), and there is no waiting period for withdrawal (whereas vesting may encourage employee retention).
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