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. 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 a team to handle the activities might not be financially sustainable, especially at the beginning stages. 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. 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). 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. Next, you need to inform the IRS if your workers are either employees or independent contractors. For your employees, you will need to fill W-4 forms. On the other hand, if the workers are independent contractors, they will need 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. It is common for small business owners to flaunt tax laws and guidelines as set by the IRS since it is a sophisticated process. 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.
A majority of business owners outsource payroll services to avoid doing the challenging task. Identify the right experts that will handle your payroll system smoothly and efficiently. As a small business owner, if you want to do taxes and payroll services, you should follow these useful steps.