How to Do 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. Since you are operating on a small scale, you might not have the required financial resources to hire an in-house team. 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.
As a small business owner, before you start preparing taxes and payroll for your team, you should apply for an Employer Identification Number. 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. On the other hand, if the workers are independent contractors, they will need 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. 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. 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. If you want to know to make a good pay stub for your business, you should click on this website now! Also, you should ensure you file all the tax forms. Late payment usually attracts huge penalties that might cripple your business financially.
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.
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