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A Guide to Preparing 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. Since you are operating on a small scale, you might not have the required financial resources to hire an in-house team. As a small business owner, you should be prepared to take care of most of your business tasks yourself, even if they are challenging. One of the challenges tasks associated with running a business is the preparation of payroll and taxes. 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. 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. The next step is understanding if your workers are either independent contractors or employees. W-4 are usually meant for employees. On the other hand, if the workers are independent contractors, they will need to fill W-9 forms.
Having a payment schedule will make the process of doing taxes and payroll much easier. Some of the crucial dates that you should note are employee pay dates, tax due dates, and tax filing dates. Ensure that the payment dates are in line with the laws and legislations of the state. 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.
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. 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. Therefore, if you want to do payroll and tax services yourself, you should use the ideas discussed in this guide.