Plan to start a business? Congrats! Coming up with a great idea is the hard part. Now you need to take care of all the necessary business licenses, permits & tax documents you need to launch your business.
Your Payroll Setup
When you’re ready to look at payroll and what’s entailed in getting it set up, start with your with your withholding tax registration. By signing up for an employer tax account number with your state, you’ll be officially registered as a business in the state, and can begin paying your payroll and withholding taxes.
Getting Your Withholding Tax Registration
Each state has a different application for withholding tax registration. Once you fill out the simple form with your business’ contact information, indicate whether it’s an LLC, corporation, or other business structure, and provide details about your employees, you will be given your employer account number and contribution tax rate, if applicable. Some states have different tiers for taxes for small business, so if yours does, it will look at your company information and assign a tax rate to you. You’ll multiply your revenue times this rate to determine how much to pay.
When It’s Tax Time
You can file tax documents to pay your taxes monthly or quarterly. Choose whichever makes sense for your cash flow. You will then be mailed payment vouchers that you can use to write a check for your withholding taxes, or you can pay them online through EFTPS or through your accounting software, if it’s set up to pay taxes electronically.
Make sure you pay your taxes by the deadlines, whether they’re each month or each quarter. Otherwise you risk incurring tax fees for late payment.