How to Do Payroll and Taxes Yourself
It is usually more stressful to manage a small business because of the limited workforce. 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. One of the tasks that every small business owner should learn how to handle is the preparation of payroll and taxes. If you decide to do payroll and taxes yourself, here are the most important things to note.
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. If you want to know the process of applying for EIN, click here for more info. now. Next, you need to inform the IRS if your workers are either employees or independent contractors. 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.
One way to simplify the payroll and tax preparation process is by creating a payment schedule. The most important dates that must appear in your payment schedule are employee pay dates, tax payment due dates, and tax filing dates. The dates should be in compliance with the dates set by the IRS or federal government. 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. One of the steps to take is withholding the right amount during payroll. If you are not sure about the amount to withhold, you should use an IRS Withholding Calculator or paycheck calculator.
Record keeping is a crucial task for every business owner to boost efficiency. 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. 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. Hiring payroll services will ensure that you do not make any mistake in the process and comply with all the IRS laws and guidelines. With the help of these steps, you will not have to worry about hiring a professional to do your taxes and payroll.