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. As a small business owner, you need to know how to share your focus, energy, and time on different crucial aspects of the business. 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. Read on to learn how you can handle taxes and payroll services for your small business.
The first step to doing taxes and payroll yourself is having an Employer Identification Number (EIN) for your business. Applying for an Employer Identification Number (EIN) is one way of information the Internal Revenue Service (IRS) about the existence of your business. It is a way of protecting your business against the Federal Government that requires all businesses to be tax-compliant. In this website, you will learn about the process of applying for an Employer Identification Number. Next, you need to inform the IRS if your workers are either employees or independent contractors. W-4 are usually meant for employees. In the case of independent contractors, they will have 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. Always have in mind the state regulations when setting the dates. Always ensure that the money required is available on the two important dates. Since the preparation of taxes is a sensitive matter, most businesses usually find themselves on the wrong side of the IRS laws. One of the steps to take is withholding the right amount during payroll. 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. The best way to keep your tax records is by making a pay stub. On the homepage of this website, you will learn a few tips for making a pay stub. Also, you should ensure you file all the tax forms. The best way to avoid fines is paying the taxes on time.
Since tax preparation is a complicated process; most small business owners opt for payroll services. Ensure that you find the best payroll services for your small business. Therefore, if you want to do payroll and tax services yourself, you should use the ideas discussed in this guide.