Running a small business is usually more challenging 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. Since you are operating on a small scale, you might not have the required financial resources to hire an in-house team. For that reason, even if a tax is challenging, you will be required to learn how to do it yourself. 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.
Before you start preparing your taxes and payroll, you need to have an Employer Identification Number (EIN). Having an EIN is a way of informing the IRS that your business exists. With an EIN, the Federal government will be able to distinguish your business as a tax-paying entity. read more here on how to apply for EIN. Next, you need to inform the IRS if your workers are either employees or independent contractors. For your employees, you will need to fill W-4 forms. On the other hand, if the workers are independent contractors, they will need to fill W-9 forms.
The next step is 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. 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. Since the preparation of taxes is a sensitive matter, most businesses usually find themselves on the wrong side of the IRS laws. One of the steps to take is withholding the right amount during payroll. IRS Withholding Calculator or paycheck calculator can help you determine the right amount to withhold as taxes.
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. Besides, you should have all your tax forms filed. Late payment usually attracts huge penalties that might cripple your business financially.
A majority of business owners outsource payroll services to avoid doing the challenging task. Identify the right experts that will handle your payroll system smoothly and efficiently. As a small business owner, if you want to do taxes and payroll services, you should follow these useful steps.