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 an in-house team might not be a good idea since it will increase your business expense. For that reason, even if a tax is challenging, you will be required to learn how to do it yourself. 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. It is a way of protecting your business against the Federal Government that requires all businesses to be tax-compliant. 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. W-4 are usually meant for employees. On the other hand, if the workers are independent contractors, they will need to fill W-9 forms.
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. Always have in mind the state regulations when setting the dates. 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. 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. 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! Also, you should ensure you file all the tax forms. The best way to avoid fines is paying the taxes on time.
A majority of business owners outsource payroll services to avoid doing the challenging 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. Therefore, if you want to do payroll and tax services yourself, you should use the ideas discussed in this guide.