Is it better to do your own payroll tax returns or hire an outside payroll company?
Generally speaking, the sophisticated clients have their own accounting staff that are sufficiently trained to do in-house payroll reporting and processing.
But, where the company is small and cannot afford its own accounting staff, the matter of processing the payroll reports and processing usually is decided by the CPA who will either steer this to a payroll processing firm or do it himself in house.
For very small clients with only one or two staff, this payroll function can easily be done in-house provided the management want to deal with the myriad of the paper work that is involved. Time is money so in some instances it still doesn't make sense to do it in-house due to the time factor!
The choice depends on whether or not you have the time to do it, the complexity of the payroll and if you don't mind handling the additional paperwork. Furthermore, do not forget that these payroll tax returns have to be filed timely, and late returns will result in substantial penalties adn interest!