When you first start a business, it’s important to get all your legal ducks in a row. If you plan to hire employees, you’ll need to set up payroll, as well as withholding and employment tax registration. By setting up your employment tax registration, you will be equipped to easily pay your federal and state taxes.
Paying Attention to Your Business Structure
Once you file your business as an LLC or corporation, the required business licenses, permits & tax documents increase from when you operated as a sole proprietor. Pay attention to important tax deadlines so that you don’t have late fees to pay.
It’s necessary to claim all your employees on your taxes and pay taxes on what you spend on payroll. You’ll also be responsible for sending out W2 and 1099 forms come tax time, so keep accurate records on employees and freelancers throughout the year.
Paying Your Taxes on Time
Once you take care of your withholding and employment tax registration, you have a few options on how you can pay your taxes. First, you can decide whether to pay them monthly or quarterly. Paying them monthly may help you keep a handle on your cash flow rather than having to come up with a lump sum every three months.
You can also decide whether you want to pay them by check or electronically. Programs like Quickbooks let you digitally make payments and record your payments in the accounting program, making it easy to stay on top of your expenses.
Keep all your expense records and receipts so that your accounting is easier. Once you’ve got your employment tax registration taken care of, the IRS will send you tax forms to fill out and payment details to submit, based on how frequently you signed up to pay your employment taxes.