How to Do Payroll and Taxes Yourself
Running a small business is usually more challenging because of the limited workforce. As a small business owner, you will be required to focus your time, energy, and talent on different tasks of the business. Since you are operating on a small scale, you might not have the required financial resources to hire an in-house team. For that reason, even if a tax is challenging, you will be required to learn how to do it yourself. One of the tasks that every small business owner should learn how to handle is the preparation of payroll and taxes. If you decide to do payroll and taxes yourself, here are the most important things to note.
Before you start preparing your taxes and payroll, you need to have an Employer Identification Number (EIN). EIN is an important number since it makes your business known to the IRS. This way, you will not have issues with the Feds. read more here on how to apply for EIN. Once you get the EIN, you should clarify if your workers are employees or independent contractors. For your employees, you will need to fill W-4 forms. In the case of independent contractors, they will have to fill W-9 forms.
The next step is creating a payment schedule. Employee pay dates, tax due dates, and tax filing dates are some of the important dates that must appear in your payment schedule. Ensure that the payment dates are in line with the laws and legislations of the state. Now that you are aware of the dates, you should focus on getting the money ready to avoid delays. Paying taxes is usually a big challenge to many small business owners, and it is common for them to have issues with the IRS. One of the steps to take is withholding the right amount during payroll. 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. The most suitable technique for keeping your tax records is creating a 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. Filing of tax forms should be done on time to avoid issues with the authorities and fines.
Since tax preparation is a complicated process; most small business owners opt for payroll services. Hiring payroll services will ensure that you do not make any mistake in the process and comply with all the IRS laws and guidelines. Therefore, if you want to do payroll and tax services yourself, you should use the ideas discussed in this guide.