A Step-By-Step Guide on How to Prepare Payroll and Taxes Yourself
It is usually more stressful to manage a small business because of the limited workforce. 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 challenges tasks associated with running a business is the preparation of payroll and taxes. The article herein is a comprehensive guide on how to do taxes and payroll yourself.
The first step to doing taxes and payroll yourself is having an Employer Identification Number (EIN) for your business. Having an EIN is a way of informing the IRS that your business exists. 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. Once you get the EIN, you should clarify if your workers are employees or independent contractors. For your employees, you will need to fill W-4 forms. 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. Some of the crucial dates that you should note are employee pay dates, tax due dates, and tax filing dates. Always have in mind the state regulations when setting the dates. Now that you are aware of the dates, you should focus on getting the money ready to avoid delays. Since the preparation of taxes is a sensitive matter, most businesses usually find themselves on the wrong side of the IRS laws. If you want to avoid issues with the IRS, you should withhold the correct amount. IRS Withholding Calculator or paycheck calculator can help you determine the right amount to withhold as taxes.
If you want things to run smoothly in your business, you should keep all the tax and payroll records. A reliable record-keeping approach that you should consider for your business is making pay stub. If you want to know to make a good pay stub for your business, you should click on this website now! Besides, you should have all your tax forms filed. Filing of tax forms should be done on time to avoid issues with the authorities and fines.
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. 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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