As a business owner, one of the administrative tasks that you need to know how to handle is the preparation of the payroll. If you have a team of workers, it is necessary that you do payroll every month. Payroll preparation is not usually a headache for well-established businesses since they can afford to outsource the services from the experts. The fact that you have access to limited finances means that you should do it yourself so that you can lower your operating costs. In as much as payroll preparation is a complicated process, and you can do it yourself successfully if you employ certain tips. However, you should be keen when doing payroll since mistakes on paychecks can lead to problems with your employees. The article herein is a step-by-step guide on how to prepare payroll yourself.
A crucial step to take when doing payroll yourself is getting your employees to fill W-4 forms. W-4 forms are for employees, while W-9 forms are for independent contractors. In the W-4 forms, your employees will get to include all their allowances. It is a way of protecting your employees from paying more tax. As a business entity, you need to inform the IRS and Federal government about your existence and tax-compliance by getting an Employer Identification Number (EIN). On the homepage of this website, you will discover more about the steps to take when applying for EIN. EIN is usually considered as the social security number of the business.
The next crucial step is doing payroll is having a payment plan. This should come after getting all the tax information and EIN. There are different payment schedules that you can choose for your business. Ensure that you have the money ready on the payment date that you choose. There is also the option of involving your employees when deciding on a payment plan. The part of doing payroll that gives most employers headache is the calculation of gross pay and deductions. It is the stage that you are likely to make a mistake when preparing your payroll. The good news is that you can rely on online tools to do it right. This page provides you with useful info. on how to do the calculations.
The process of preparing payroll is completed by filing tax forms. As a business owner, you have the mandate to withhold correct tax amounts and remit to the Federal government. Filling tax forms will ensure that you don’t get into problems with the IRS. Delays when filing tax forms are not usually treated lightly by the IRS. Therefore, if you are wondering how to do your payroll yourself, you should start employing these useful tips now.