A Step-By-Step Guide on How to Prepare 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 will be required to focus your time, energy, and talent on different tasks of the business. Hiring an in-house team might not be a good idea since it will increase your business expense. 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.
Before you start preparing your taxes and payroll, you need to have an Employer Identification Number (EIN). Having an EIN is a way of informing the IRS that your business exists. 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. W-4 are usually meant for employees. W-9 forms are usually meant for independent contractors.
Having a payment schedule will make the process of doing taxes and payroll much easier. The most important dates that must appear in your payment schedule are employee pay dates, tax payment 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. 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 this page, you will discover more info. about the process of making a pay stub. The next thing is filling all the tax forms. 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. 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.