“How’s that spreadsheet working out for you?”
Did you know that the IRS typically penalizes one out of every three business owners for payroll errors? It’s a minefield for busy owners, so avoid the traps, hire a professional!
Here are the steps to set up a payroll system for your small business.
- Obtain a Federal Employer ID Number (EIN)
- Check whether you need State or Local ID’s
- You do for OR (BIN) &
- WA (UBI)
- Do you employ Independent Contractors or Employees? Know the difference!
- What about yourself as owner? – That depends on your tax entity type.
- Take care of employment paperwork
- W4’s & I9’s
- Decide on a pay period (frequency)
- Document your employee compensation terms
- Choose a payroll system/service
- In-house or Outsource
- Set up employee and payroll tax information
- Print and Distribute your payroll
- Make Federal and State (if applicable) Payroll Tax Payments
- Based on frequency and value of payroll)
- Prepare Payroll Tax Reports
- Federal, State, County, City (as applicable)
- Quarterly (941)
- Year End
- Produce W2’s and 1099’s
- Produce W3 and 1096 summary forms
- Prepare Annual Federal Unemployment Return (940)
- Prepare OR Form WR (annual reconciliation)