Who should do payroll?

[ShredtheGnar]

A bit complex. 5 employees. Mix of part/full time. Shift work paid by the hour. Pay differential for day vs night, 2 tiers of holiday pay, and some of the veteran part timers get different pay than the newcomers. Group paying malpractice insurance and up to $2000 of health insurance (all insurance policies are purchased by the individual doc. Not group plans) a month for the FT employees. Will also have a profit share, safe harbor group 401k plan later in the year. I was going to do it myself with QB payroll. Using QBO for bookkeeping. Thinking of farming out payroll. Is this something that Gusto’s QB’s payroll Service can do without making errors? Or is this better suited to a local CPA service that can do this in house? Or is it better that I keep dealing with it to insure that it is done correctly? I don’t mind doing it, but is rather time consuming. I have found that it is very difficult to find competent local services. Anyone that is any good seems to have enough business that they don’t want to take on new clients.

[jfoxcpacfp]

Try Gusto - haven’t heard any complaints yet. If you do go with a CPA, no reason they need to be local, though .

[jacoavlu]

this is for a partnership correct?

is this payroll only for non-partner employees, ie owners are going to be paid separately? Or is this payroll for everyone owners included?

because the practice should not pay W2 wages to partners.

I think you should have the practice CPA do your payroll. And your bookkeeping also.

[ShredtheGnar]

this is for a partnership correct?

is this payroll only for non-partner employees, ie owners are going to be paid separately? Or is this payroll for everyone owners included?

because the practice should not pay W2 wages to partners.

I think you should have the practice CPA do your payroll. And your bookkeeping also.

For non-partner employees who are W2. Partners are paid separately and there are 4. To complicate thing even more we have an IC and will probably add more as the group needs more coverage. Currently have a CPA that won’t return my calls or emails. Never got a letter of engagement or a bill for the work he did with our lawyer for the last 2 months either. Looking for another CPA and interviewing one tomorrow. Found another one that seems pretty sharp but he won’t take us on until May due to his current work load.

[ShredtheGnar]

Try Gusto - haven’t heard any complaints yet. If you do go with a CPA, no reason they need to be local, though .

You are correct. Could be someone out of my area. I’m just used to meeting face to face with CPA and dropping off paperwork, etc. We had a good local guy, but he recently sold his business to a larger one. We got handed off to the new owner. He has not been up front and honest with us. Went to a monthly fee to cover payroll and corporate filing for a single owner/employee S corp which was supposed to include our personal taxes as well. Then we got charged $2k+ for our personal filing on top of the $4k yr with the monthly fee. For the new business set up, he wanted us to be a C corp. That made no sense in my book. Seems like he was just trying to maximize his profits. Also tried to link us up with his FA who I guarantee is not a fiduciary.

[jacoavlu]

Your situation sounds like a mess. Sorry. Your options now are limited.

Gusto should work for you. Will be much easier for you if your employees onboard themselves. Much less data entry for you. The process will take some time to learn. There is an ability to take “owners draw” through Gusto which may be appropriate for paying partners but I don’t know. As an S Corp we don’t use that.

call Gusto and talk with them. In my experience their customer support has been helpful.

[Tim]

“can do without making errors?”
Think about this statement and what the tasks are that will save you time. (Pay someone else).
•employee master files
•current data file for that payroll
•reviewing payroll that what was intended was actually paid
•payroll tax reporting
•interface with your accounting system
Running payroll is basically a software choice, push the button. The accuracy/errors depend on the configuration and data entry. A payroll service will still require you to do the first two and the tax reporting. What are the errors? Data entry or configuration? The review and interface cannot be outsourced.
Regardless, you need your “new” CPA to review the configuration and process. Compliant with the tax and financial reporting are accurate.
Not a review of each payroll, but that the process and setup result in accurate reporting.
If you submit bad data to the software or its configured wrong, that’s garbage in garbage out.
Errors are usually along the lines that the payroll system did not process an item the way you thought it would (CPA, QB,Gusto) . Data integrity and processing errors should not be a concern.
So back to the question, what errors and what tasks are being outsourced? Any of the three give processing support. Only the CPA will really handle the tax and financial reporting aspects.
Pick a service and get the new CPA to review it.

[ShredtheGnar]

Tim forgot to mention that I am meeting with a QB Pro Advisor tomorrow as well to insure that the bookkeeping is set up properly. Guess I’m putting the cart in front of the horse, but kind of forced into this situation. Wish we had a good CPA to ensure that the bookkeeping was set up the way they want for tax purposes. The CPA I’m meeting is with the same group as the QB pro. I’m hoping they are good set up. The W2 employee payroll is pretty straight forward. The question is how to best deal with paying the insurance and owners’ compensation for tax efficiencies. I will give Gusto a call. I have enough to deal with as is, so farming out the payroll makes sense.

[jacoavlu]

Regarding health insurance. Sounds like you are offering some premium reimbursement as an employee benefit? Do you have a HRA plan established?

[ShredtheGnar]

Regarding health insurance. Sounds like you are offering some premium reimbursement as an employee benefit? Do you have a HRA plan established?

No, we aren’t using an HRA plan. The CPA we had said we should have the LLC pay each person’s personal insurance plans for the best tax set up. Group health plan was extremely cost prohibitive. 2 of the owners and some of the W2 people work for other hospitals/clinics as 1099 contractors. So guessing that most of us have HSAs with HD plans already in place.

[jacoavlu]

Group paying... up to $2000 of health insurance (all insurance policies are purchased by the individual doc. Not group plans) a month for the FT employees....


No, we aren’t using an HRA plan. The CPA we had said we should have the LLC pay each person’s personal insurance plans for the best tax set up... 2 of the owners and some of the W2 people work for other hospitals/clinics as 1099 contractors. So guessing that most of us have HSAs with HD plans already in place.

I can’t understand what you’re doing with insurance.

[jfoxcpacfp]

I don’t think you’ve been getting good advice. Look into a QSEHRA for your insurance benefits.

[spiritrider]

No, we aren’t using an HRA plan. The CPA we had said we should have the LLC pay each person’s personal insurance plans for the best tax set up. Group health plan was extremely cost prohibitive. 2 of the owners and some of the W2 people work for other hospitals/clinics as 1099 contractors. So guessing that most of us have HSAs with HD plans already in place.

Your CPA is clueless and this malpractice would cause you to be subject to a $100/day/employee penalty if you do this. Under the ACA, reimbursing employee's health insurance premiums pre-tax is not permitted. See IRS Notice 2013-54

As jfoxcpacfp pointed, a work around was created with the introduction of the QSEHRA. This is the best course of action. The only other legal way of reimbursing an employee's health insurance premium is as a taxable wages. That would be subject to employer/employee FICA taxes and subject to employee income tax liability.

With the exception of the knowledgeable CPAs on this forum. Most CPAs are a poor source of knowledge on employer health and welfare plans and employer retirement plans.

[ShredtheGnar]

I don’t think you’ve been getting good advice. Look into a QSEHRA for your insurance benefits.

Would an ICHRA be a better option? We could basically still pay the same amounts as we do now since there are no contribution limits. How would this work with Members’ insurance? Can employees still contribute to a HSA Account with these plans?

[ShredtheGnar]

Your CPA is clueless and this malpractice would cause you to be subject to a $100/day/employee penalty if you do this. Under the ACA, reimbursing employee's health insurance premiums pre-tax is not permitted. See IRS Notice 2013-54

As jfoxcpacfp pointed, a work around was created with the introduction of the QSEHRA. This is the best course of action. The only other legal way of reimbursing an employee's health insurance premium is as a taxable wages. That would be subject to employer/employee FICA taxes and subject to employee income tax liability.

With the exception of the knowledgeable CPAs on this forum. Most CPAs are a poor source of knowledge on employer health and welfare plans and employer retirement plans.

I was afraid of this. Is our lawyer clueless as well?