It is usually more stressful to manage a small business because of the limited workforce. 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. For that reason, even if a tax is challenging, you will be required to learn how to do it yourself. 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.
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. With an EIN, the Federal government will be able to distinguish your business as a tax-paying entity. 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. 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. Always ensure that the money required is available on the two important dates. 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.
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. The next thing is filling all the tax forms. Late payment usually attracts huge penalties that might cripple your business financially.
Since tax preparation is a complicated process; most small business owners opt for payroll services. 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.