A Step-By-Step Guide on How to Prepare Payroll and Taxes Yourself
Running a small business is usually more challenging because of the limited workforce. 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 a team to handle the activities might not be financially sustainable, especially at the beginning stages. 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. The article herein is a comprehensive guide on how to do taxes and payroll yourself.
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. 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. W-9 forms are usually meant for independent contractors.
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. The dates should be in compliance with the dates set by the IRS or federal government. After setting the payment dates, you should ensure that you have the money need to pay all your workers on the set date. Paying taxes is usually a big challenge to many small business owners, and it is common for them to have issues with the IRS. 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.
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. If you want to know to make a good pay stub for your business, you should click on this website now! Besides, you should have all your tax forms filed. 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. Identify the right experts that will handle your payroll system smoothly and efficiently. With the help of these steps, you will not have to worry about hiring a professional to do your taxes and payroll.
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