How to Do Payroll and Taxes Yourself
Running a small business is usually more challenging 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. 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. Read on to learn how you can handle taxes and payroll services for your small business.
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. In this website, you will learn about the process of applying for an Employer Identification Number. The next step is understanding if your workers are either independent contractors or employees. W-4 are usually meant for employees. W-9 forms are usually meant for independent contractors.
One way to simplify the payroll and tax preparation process is by 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. 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. It is common for small business owners to flaunt tax laws and guidelines as set by the IRS since it is a sophisticated process. If you want to avoid issues with the IRS, you should withhold the correct amount. If you are not sure about the amount to withhold, you should use an IRS Withholding Calculator or paycheck calculator.
Keeping tax records is encouraged if you want to solve issues with the IRS fast. A reliable record-keeping approach that you should consider for your business is making pay stub. On the homepage of this website, you will learn a few tips for making a pay stub. Besides, you should have all your tax forms filed. 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.
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