How to Do Payroll and Taxes Yourself
Access to a limited workforce makes it hard for small businesses to grow and thrive. As a small business owner, you need to know how to share your focus, energy, and time on different crucial aspects 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. It, therefore, means that you will be required to take care of all the tasks yourself irrespective of the degree of expertise required. 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.
The first step to doing taxes and payroll yourself is having an Employer Identification Number (EIN) for your business. 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. In this website, you will learn about the process of applying for an Employer Identification Number. Next, you need to inform the IRS if your workers are either employees or independent contractors. W-4 are usually meant for employees. In the case of independent contractors, they will have to fill W-9 forms.
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. 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. If you want to avoid issues with the IRS, you should withhold the correct amount. With the help of the IRS Withholding Calculator or paycheck calculator, you will know the right amount to withhold.
Record keeping is a crucial task for every business owner to boost efficiency. 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. Besides, you should have all your tax forms filed. Late payment usually attracts huge penalties that might cripple your business financially.
Most business owners prefer working with payroll preparation experts to avoid the daunting and stressful task. Hiring payroll services will ensure that you do not make any mistake in the process and comply with all the IRS laws and guidelines. With the help of these steps, you will not have to worry about hiring a professional to do your taxes and payroll.
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