How to Do Payroll and Taxes Yourself
Running a small business is usually more challenging because of the limited workforce. If you own a small business, you will be the one to take care of all the tasks from administrative to marketing, which can be challenging. Since you are operating on a small scale, you might not have the required financial resources to hire an in-house team. It, therefore, means that you will be required to take care of all the tasks yourself irrespective of the degree of expertise required. The two important things that you should learn how to do are preparation of taxes and payroll for your business. If you decide to do payroll and taxes yourself, here are the most important things to note.
As a small business owner, before you start preparing taxes and payroll for your team, you should apply for an Employer Identification Number. Applying for an Employer Identification Number (EIN) is one way of information the Internal Revenue Service (IRS) about the existence of your business. This way, you will not have issues with the Feds. If you want to know the process of applying for EIN, click here for more info. now. Next, you need to inform the IRS if your workers are either employees or independent contractors. If your workers are employees, then they will be required to fill W4 forms. In the case of independent contractors, they will have to fill W-9 forms.
One way to simplify the payroll and tax preparation process is by creating a payment schedule. Some of the crucial dates that you should note are employee pay dates, tax due dates, and tax filing dates. Always have in mind the state regulations when setting the dates. Always ensure that the money required is available on the two important dates. It is common for small business owners to flaunt tax laws and guidelines as set by the IRS since it is a sophisticated process. Withholding the correct amount will ensure that you don’t get into problems with the IRS. With the help of the IRS Withholding Calculator or paycheck calculator, you will know the right amount to withhold.
If you want things to run smoothly in your business, you should keep all the tax and payroll records. A reliable record-keeping approach that you should consider for your business is making pay stub. On the homepage of this website, you will learn a few tips for making a pay stub. Also, you should ensure you file all the tax forms. Late payment usually attracts huge penalties that might cripple your business financially.
A majority of business owners outsource payroll services to avoid doing the challenging task. Ensure that you find the best payroll services for your small business. As a small business owner, if you want to do taxes and payroll services, you should follow these useful steps.