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. 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. 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. It is a way of protecting your business against the Federal Government that requires all businesses to be tax-compliant. read more here on how to apply for EIN. The next step is understanding if your workers are either independent contractors or employees. For your employees, you will need to fill W-4 forms. 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. Ensure that the payment dates are in line with the laws and legislations of the state. 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. Withholding the correct amount will ensure that you don’t get into problems with the IRS. 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. If you want to know to make a good pay stub for your business, you should click on this website now! Also, you should ensure you file 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. With the help of these steps, you will not have to worry about hiring a professional to do your taxes and payroll.