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3 Benefits Of Partnering With A PEO Come Tax Time

December 29, 2021

3 Benefits of partnering with a PEO come tax time Cheerful PEO helping client

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When choosing a professional employment organization (PEO), you need complete confidence that they will help you mitigate risk, free up your capacity, and look out for your best interest. Come tax time, the right partner will have done the hard work of setting you up for success as well. 

Below are three benefits that come from partnering with a PEO leading into tax season. 

What is a PEO?

A professional employer organization is a strategic partner for businesses in need of core administrative support. Unlike vendors that may only be involved in one area, a PEO is a true partnership that offers a comprehensive solution. At SouthEast Personnel Leasing (SPLI), that partnership includes workers’ compensation coverage, payroll administration, benefits, and safety and risk management.

The Role of a peo in your business

You are busy with sales, marketing, operations, and the many other facets of running a successful company. As you grow, the demands on your time and energy increase too. 

By bringing these essential functions all under one roof, PEOs like SPLI ensure you:

  • Mitigate unnecessary risk
  • Feel confident in your operation
  • Have an experienced team of experts keeping you compliant

It’s important to clarify that a PEO relationship does not mean you as the business owner lose control over your company. You continue handling the day-to-day operations, and the PEO focuses on freeing you by facilitating employment-related tax preparation, payroll, unemployment claims, and more. 

Benefit: Clearly defined roles and responsibilities come tax time

The reality in business is that simplicity scales; complexity doesn’t. Knowing who is responsible, creates clearly defined roles that guide your entire year–not just at tax time. 

Let’s perform a high-level breakdown of the roles and responsibilities for businesses and PEOs. 

Business
Professional Employer Organization
You hire, train, and develop employees.
We handle payroll.
You direct the daily activities of employees.
We perform quarterly tax filings.
You set wages for all employees.
We facilitate unemployment.

 

Come tax time, filing takes place under the PEOs EIN. As outlined in the IRS’ PEO Agreement, If a third party, such as a PEO, is a statutory employer, it will be the person responsible for the employment taxes on the wage payments that it had exclusive control of.” 

This effectively removes business owners from filing liability in the event of non-compliance.

Benefit: Less on your plate come tax time

We speak with business owners across many industries–from hospitality and construction to security and staffing. A common theme from all of those conversations is how much they have on their plate. Let’s face it. Growing a business is a grind. 

Handling payroll and the related taxes can be an overwhelming add-on that piles more on your plate. According to a recent study, business owners are spending nearly five hours filing and paying payroll taxes each pay period

Not only is this time you could spend elsewhere, but the consequences of making a payroll-related mistake are also grave.

Even though PEOs are not CPAs or tax professionals, the work we do for your business still positions you for a stress-free tax season and lifts a tremendous burden year-round. 

Here is a perfect example of how teaming up with SPLI as your PEO lessens your plate during this process:

We assume responsibility for federal, state, and local tax filings of all our clients. 

  • Our payroll tax services include: 
    • State withholdings
    • Unemployment FUTA and SUTA
    • 940 and 941 filings
    • Managing deductions and tax withholdings from employee wages, 
    • Paying the correct amount to various tax agencies during the quarterly filing process
    • Annual W-2 creation distribution and filings

Benefit: a team of experts in your corner leading up to tax time

Every Spring, business owners across the country lament the amount of time, energy, and effort they have to put into preparing their business for tax filing. Thankfully, this doesn’t have to be the case for you.

If you have already brought in a CPA or tax professional to help with your books, PEOs offer a parallel complement with core administrative functions like payroll administration, workers’ compensation coverage, benefits, and safety and risk management

The beauty of our model is we come alongside you throughout the year, not during just one season, to make sure you are consistently covered and compliant. 

Wondering if workers’ compensation is tax-deductible? This is a common question we answer. Our team can talk you through the complexities of employer premiums, medical benefits, and lost wages paid to employees. 

Curious about withholding adjustments? We can answer this too as we align employee withholdings with regulations and update all related federal forms annually. 

We aim to be the team of experts that help you mitigate risk and feel confident in your operation year-round. 

How do i determine if a peo like spli is the right fit for my business?

Any business leader looking to grow their business needs support so that the complexities of payroll and other related core functions don’t keep you from focusing on building your company. 

Are you:

  • Wondering if you’re fully covered and compliant?
  • Spending too much time frustrated with payroll administration?
  • Running out of capacity to address the most important functions of your business?

If your answer was “yes” to any of these questions, our team is here to help. 

Start by requesting a quote, and we will provide pricing and get all your questions answered. 

Interested in seeing the 5 benefits to bundling workers' compensation coverage and payroll administration?

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