A Guide to Preparing Payroll and Taxes Yourself
Access to a limited workforce makes it hard for small businesses to grow and thrive. 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. Hiring an in-house team might not be a good idea since it will increase your business expense. As a small business owner, you should be prepared to take care of most of your business tasks yourself, even if they are challenging. One of the tasks that every small business owner should learn how to handle is the preparation of payroll and taxes. The article herein is a comprehensive guide on how to do taxes and payroll yourself.
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. With an EIN, the Federal government will be able to distinguish your business as a tax-paying entity. If you want to know the process of applying for EIN, click here for more info. now. The next step is understanding if your workers are either independent contractors or employees. If your workers are employees, then they will be required to fill W4 forms. W-9 forms are usually meant for independent contractors.
Having a payment schedule will make the process of doing taxes and payroll much easier. 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. After setting the payment dates, you should ensure that you have the money need to pay all your workers on the set date. Since the preparation of taxes is a sensitive matter, most businesses usually find themselves on the wrong side of the IRS laws. Withholding the correct amount will ensure that you don’t get into problems with the IRS. If you are not sure about the amount to withhold, you should use an IRS Withholding Calculator or paycheck calculator.
If you want things to run smoothly in your business, you should keep all the tax and payroll records. The best way to keep your tax records is by making a pay stub. On the homepage of this website, you will learn a few tips for making a pay stub. The next thing is filling 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. As a small business owner, if you want to do taxes and payroll services, you should follow these useful steps.