A Step-By-Step Guide on How to Prepare 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 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. As a small business owner, you should be prepared to take care of most of your business tasks yourself, even if they are challenging. The two important things that you should learn how to do are preparation of taxes and payroll for your business. 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. This way, you will not have issues with the Feds. In this website, you will learn about the process of applying for an Employer Identification Number. Once you get the EIN, you should clarify if your workers are employees or independent contractors. If your workers are employees, then they will be required to fill W4 forms. W-9 forms are usually meant for independent contractors.
One way to simplify the payroll and tax preparation process is by 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. Now that you are aware of the dates, you should focus on getting the money ready to avoid delays. Paying taxes is usually a big challenge to many small business owners, and it is common for them to have issues with the IRS. 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.
Keeping tax records is encouraged if you want to solve issues with the IRS fast. The most suitable technique for keeping your tax records is creating 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. 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. Therefore, if you want to do payroll and tax services yourself, you should use the ideas discussed in this guide.