How Good Is A Payroll Tax Software?

If you are a small business owner, payroll tax software can help you take control of your employee withholding, social security, and other common payroll taxes. Chances are you probably already use some sort of accounting software in your small business to have a better understanding of how your business is performing and to help you control day to day cash flow operations. However, you may not have been aware that the same accounting software that you use may also allow for the integration of a payroll module as well.

Common Payroll Tax Software Applications

Many entrepreneurs and small business owners use popular accounting software packages, such as: QuickBooks, Peachtree as well as other popular applications. Many of these applications either have a built in payroll application or allow you to install a separate payroll only module. Generally speaking, the payroll modules of popular accounting software programs perform most, if not all, `basic payroll and payroll tax operations.`

In addition to the payroll tax applications themselves, the developers of these programs often offer online filing and payment services for payroll taxes. The online services offered by the software developers allow you to file payroll taxes with your State Department of Revenue as well as the Internal Revenue Service. Furthermore, these online services integrate directly with your payroll software and allow you to even make your payroll tax payments over the Internet. In fact, many small professional accounting offices use this type of software to file and pay payroll taxes on behalf of their clients.

Tax Rate Accuracy Concerns

Popular payroll tax modules and software applications like QuickBooks and Peachtree allow you to always update your payroll tax tables to the latest and most current versions available. These software companies have negotiated deals with state departments of revenue as well as the Internal Revenue Service, and are allowed to download all the latest and relevant most relevant tax tables as they become available.

Then, the software manufacturers make the updates available to registered owners of their software applications. In most cases, the updating of tax rate percentages and tables is done automatically, and the small business owner or accountant need not worry about if their tax rate information is up to date and accurate.

Benefits of Doing It the Old Way

Payroll tax software made these days is very accurate and easy-to-use. In fact, payroll tax software has advanced to such a level that very few business owners choose to calculate payroll taxes the old-fashioned way, which involves using Internal Revenue Service bulletins and tax tables and computing the employee’s tax withholding amounts by hand. Doing it by hand often results in calculation errors and mistakes that could lead to penalties and fines in the long run. As the computer doesn't make simple addition and subtraction mistakes, you can always count on the software application displaying accurate withholding amounts as well as properly calculating payment amounts to be transmitted to the relevant tax agency. In short, payroll tax software makes preparing your payroll taxes a lot easier, more accurate and more efficient.