When to throw in the towel on a task

At the end of 2008, I wrote a post about post about outsourcing that generated quite a bit of interest, so I thought it was worth raising this topic again. After years of battling with my business payroll taxes (I have an S-Corp and thus have to file quarterly payroll taxes and a separate year-end tax return for the business), I decided to hand that task over to my accountant and so far I’m really pleased with how it’s going. For $40 per month, my accountant will run payroll (I’m the business’ only employee, so this isn’t a monumental task), automatically withhold the appropriate tax amounts from my gross pay, file my quarterly payroll taxes and issue my own W-2 at the end of the year, along with 1099-MISCs for anyone to whom I subcontract more than $600 worth of work.

I decided to throw in the proverbial towel on this task for a variety of reasons: most of all, I just hate accounting. In addition, the paperwork burden associated with corporate taxes increases as you make more money. If you have an S-Corp and you owe more than $2,500 per quarter in federal income tax, you have to electronically deposit your payments every month, rather than sending a check in once per quarter. Then if you have subcontractors earning more than $600 per year, you have to collect W-9s from all of those people, calculate who you paid more than $600 and issue 1099s to them. Although I write all of the appropriate deadlines on my calendar, on a couple of occasions I’ve forgotten to initiate the electronic tax deposit soon enough; the deposit takes a couple of business days to process, so if the due date is on a Monday, you have to initiate the deposit by the morning of the Thursday before. The IRS no longer offers printable 1099-MISC forms on its website, so you have to order the forms by phone and they take 3-5 weeks to arrive…do you have a headache yet?

I decided to outsource this task because it passes the two main outsourcing-qualification tests: I don’t enjoy the task and the outsourcing will pay for itself immediately. It’s gotten me thinking about other tasks to outsource, but for now I feel that at least I made the right decision by admitting defeat on this one! Readers, any tasks you’re thinking of outsourcing in 2010?

9 Responses to “When to throw in the towel on a task”
  1. Sara February 3, 2010
  2. Thierry February 3, 2010
  3. céline February 3, 2010
  4. Tapani Ronni February 4, 2010
  5. Joan February 4, 2010
  6. Corinne McKay February 5, 2010
  7. Sarah February 8, 2010
  8. Elizabeth March 9, 2010
  9. Risk Management May 3, 2010

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