What services does DWK Tax & Accounting offer?

DWK Tax & Accounting offers tax preparation and planning, bookkeeping, accounting, business advisory, and outsourced CFO services for individuals and small businesses in Wheaton, IL and DuPage County.

Where is DWK Tax & Accounting located?

DWK Tax & Accounting is based in Wheaton, Illinois, serving clients throughout DuPage County including Naperville, Glen Ellyn, Lisle, Downers Grove, and the greater Chicago suburbs.

Do you work with small businesses?

Yes. DWK Tax & Accounting specializes in serving small business owners, entrepreneurs, and growing companies who need more than basic tax compliance, including strategic advisory and fractional CFO support.

How do I schedule a consultation?

You can schedule a consultation by visiting https://dwkcpa.com/contact, calling (708) 369-0044, or emailing david@dwktaxaccounting.com.

What is the most common payroll mistake small businesses make?

The most common mistake is misclassifying employees as independent contractors. Employers do this to avoid payroll taxes, but the IRS and Illinois Department of Revenue actively pursue misclassification. If reclassified, the employer owes back payroll taxes plus penalties and interest, often amounting to tens of thousands of dollars. The distinction depends on behavioral control, financial control, and the relationship, not on what you call the worker.

What payroll tax filings do small businesses need to make?

Small businesses must file quarterly federal payroll tax returns (Form 941), annual federal unemployment tax return (Form 940), Illinois unemployment tax returns, W-2s for employees (due January 31), and 1099-NECs for contractors (due January 31). Depending on your payroll size, you may also need to make federal tax deposits on a monthly or semi-weekly schedule. Missing any of these triggers penalties.

How do I know if someone is an employee or a contractor?

The IRS uses three factors: behavioral control (do you control how the work is done?), financial control (do you control the business aspects of the job?), and relationship type (is there a written contract, benefits, permanence?). If you control when, where, and how the work is performed, provide tools and training, and the relationship is ongoing, the worker is likely an employee. When in doubt, classify as an employee, the penalties for misclassification are severe.

What happens if I miss a payroll tax deposit?

Missing a payroll tax deposit triggers failure-to-deposit penalties ranging from 2% to 15% of the undeposited amount, depending on how late the deposit is. These penalties add up quickly and compound with interest. The IRS also may convert your deposit schedule from monthly to semi-weekly, increasing administrative burden. Consistent deposits on time are essential.

Can DWK handle payroll for my small business?

Yes. We provide full-cycle payroll processing, tax filings, W-2 and 1099 preparation, and compliance for small businesses. We handle the calculations, deposits, and filings so you can focus on running your business. Our payroll services are integrated with our bookkeeping and tax preparation for seamless financial management.

Payroll Mistakes Small Businesses Make

Payroll is one of the most compliance-heavy areas of running a business, and it is where small businesses make some of their most expensive mistakes. Between federal and state tax deposits, quarterly filings, worker classification, and year-end reporting, there are many opportunities to err, and each error carries penalties that can dwarf the original tax amount. Here are the most common payroll mistakes and how to avoid them.

1. Misclassifying Employees as Contractors

The most costly payroll mistake is classifying an employee as an independent contractor. Employers do this to avoid payroll taxes, workers' compensation, and benefits. But the IRS and Illinois Department of Revenue aggressively pursue misclassification. If an audit reclassifies your contractors as employees, you owe back payroll taxes plus penalties and interest, often tens of thousands of dollars.

The distinction is based on behavioral control, financial control, and the relationship. If you control when, where, and how work is performed, provide tools, and the relationship is permanent, the worker is likely an employee. When in doubt, classify as an employee or consult a CPA. Our payroll services help you classify workers correctly.

2. Missing Payroll Tax Deposit Deadlines

Federal payroll taxes must be deposited on a monthly or semi-weekly schedule, depending on your total tax liability. Missing a deposit deadline triggers failure-to-deposit penalties from 2% to 15% of the undeposited amount. Illinois has its own deposit requirements. Many small businesses miss these deadlines because they do not realize the schedule or because cash flow issues delay the deposit.

3. Filing Form 941 Late or Incorrectly

Form 941, the quarterly federal payroll tax return, is due at the end of the month following each quarter (April 30, July 31, October 31, January 31). Filing late triggers penalties of 5% per month, up to 25% of the unpaid tax. Filing with errors can result in IRS notices and additional penalties. Accurate preparation requires matching wages, tips, and tax withholdings to your payroll registers.

4. Incorrect Withholding Calculations

Employee withholding must account for federal income tax, Social Security, Medicare, Illinois state income tax, and, where applicable, local taxes. Errors in withholding mean employees owe at tax time (creating unhappy employees) or receive large refunds (meaning you over-withheld). The W-4 form drives federal withholding, and Illinois has its own withholding form (IL-W-4). Proper setup and regular review prevent errors.

5. Missing Year-End Filings (W-2s and 1099s)

W-2s for employees and 1099-NECs for contractors are due by January 31, both to the recipients and to the government. Missing this deadline triggers penalties of $50-$280 per form. Many small businesses miss this because they are focused on their own tax return preparation in January and February. We prepare and file W-2s and 1099s as part of our payroll services.

6. Not Filing Form 940 (Federal Unemployment Tax)

Form 940 is the annual federal unemployment tax return, due January 31. It covers FUTA tax, which employers pay on the first $7,000 of each employee's wages. Many small businesses forget this filing because it is annual rather than quarterly. Missing it triggers penalties and interest on the unpaid FUTA tax.

7. Not Carrying Workers' Compensation Insurance

Illinois requires nearly all employers to carry workers' compensation insurance. Operating without it is a criminal offense that can result in fines, stop-work orders, and personal liability for the business owner. Even if you have only one employee, you likely need coverage. This is not technically a payroll mistake, but it is a related compliance requirement that many small businesses overlook.

8. Not Reconciling Payroll to Books

Payroll costs must be recorded accurately in your accounting system, gross wages, employer payroll taxes, benefits, and garnishments. If payroll is not reconciled to your books, your financials are wrong, your tax return is prepared from inaccurate numbers, and you may overpay or underpay taxes. Our monthly bookkeeping includes payroll reconciliation.

How to Avoid Payroll Mistakes

Every mistake on this list is preventable with professional payroll management. DWK Tax & Accounting provides full-cycle payroll processing that handles calculations, deposits, filings, and year-end reporting, all integrated with your bookkeeping and tax preparation. We serve businesses across Wheaton, Naperville, and Addison. Contact us to learn how we can take the payroll burden off your shoulders.