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 will be required to focus your time, energy, and talent on different tasks 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. 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. Having an EIN is a way of informing the IRS that your business exists. 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. The next step is understanding if your workers are either independent contractors or employees. W-4 are usually meant for employees. In the case of independent contractors, they will have 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. 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. One of the steps to take is withholding the right amount during payroll. With the help of the IRS Withholding Calculator or paycheck calculator, you will know the right amount to withhold.
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. Also, you should ensure you file all the tax forms. The best way to avoid fines is paying the taxes on time.
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. As a small business owner, if you want to do taxes and payroll services, you should follow these useful steps.
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