In general, the Internal Revenue Services defines a “lookback period” as the amount of time it can use to determine if the taxes you filed and paid are correct. These periods aren’t always the same — in fact, different types of lookback periods sometimes exist for different filings.
Understanding the Lookback Period
All business owners, including sole proprietors, must remit payroll taxes to the federal government. These payroll taxes include Social Security and Medicare payments, which are mandatory contributions, in addition to federal income tax.
Employers must file payroll taxes quarterly in most cases, although some very small businesses with a total tax liability of less than $10,000 can file annually. Your lookback period depends in part on when you established your business and the amount of your payroll tax obligation, although that can change if the IRS believes you’ve significantly underreported income.
You must make your payroll tax deposits using the federal EFTPS system. Payroll software from BCM Payroll Services, Inc. can help manage the details, including sending deposit reminders and processing the payments. As a business owner, however, you’re still ultimately responsible for ensuring that taxes are collected and paid on time, every time.
How Do I Avoid Lookback Period Problems?
Lookback period problems can cause significant difficulties for business owners, especially if the IRS believes you’ve underreported income or underpaid payroll taxes. You can avoid payroll lookback problems by:
- Working with a payroll services provider. BCM Payroll Services, Inc. guarantees that we’ll collect and remit employee payroll taxes on time or pay any fines that result.
- Knowing your payroll tax deposit schedule. Your payroll tax schedule depends on the amount of payroll taxes you collect. BCM Payroll Services, Inc. can ensure you’ll remit payroll taxes by your deadline so that you can avoid fines and related problems.
- Determining whether you’re qualified to submit payroll taxes on an annual basis, a quarterly basis, a monthly basis or a biweekly basis.
- Reporting all income and wages paid properly.
The Five Power Promises From BCM Payroll Services, Inc.
BCM Payroll Services, Inc. understands that seamless management of payroll taxes is essential to the success of your business. That’s why we provide the Five Power Promises:
- If we calculate net or gross pay for anyone in your organization, we’ll discount your payroll processing fee.
- We’ll respond to you in two business hours or less or we’ll discount your payroll processing fee.
- If a payroll tax penalty is our fault, we’ll pay the fine.
- You can submit your payroll data the way you want to, including calling and faxing.
- We guarantee on-time delivery of your payroll.
Contact BCM Payroll Services, Inc. for More Information
BCM Payroll Services, Inc. provides comprehensive payroll tax services to businesses in central Pennsylvania and beyond. When you choose us for your payroll tax services, you can get back to focusing on what matters most — your business. Whether you’re a for-profit business or a non- or not-for-profit organization, BCM Payroll Services, Inc. can help you manage your payroll tax administration needs.
For more information about BCM Payroll Services, Inc., contact us today.