Today we hear from Amanda in TN who tells us. “I am an owner of a small business. I need to know what form to use for my payroll deposits. Do I pay quarterly or monthly? I’ve been trying to figure this out since our first payroll last month. So can I double my payments for this month and last month?”
Dear Amanda,
When it comes to owners of small businesses, who don’t have experience with accounting and payroll, I always urge that you use a payroll service to take care of all the computations, reporting and deposits.
But, if you’d rather do it yourself, first, get hold of your state’s tax office and find out how to pay your State Unemployment Taxes (SUTA). I couldn’t find anything doing a quick search of the Tennessee tax site. There’s no payroll tax in Tennessee, but there is SUTA.
As to Federal forms:
You were sent an envelope by IRS when you got your employer identification number. In it was a narrow yellow booklet with forms in it – Form 8109. Those are vouchers to be used to make a variety of federal tax payments, including payroll. Take your check to the bank with the voucher.
If you don’t have that booklet, they’re really hard to come by quickly. (Read this to understand the experience
https://www.marketwatch.com/news/story/business-payment-deadline-looms-dont/story.aspx?guid=%7B1FC384CA-B101-4150-BE04-C82434E8ECC1%7D )
Call 800-829-3676 (800-TAX FORM) and ask for the 8109 vouchers. It will take a couple of weeks to get more vouchers.
Meanwhile, consider opening an online Electronic Federal Tax Payment System (EFTPS) account. It’s free and every business should have one. In the future, you’ll be able make the payments from your computer, without going to the bank.
Now, good news. If your payroll deposit hasn’t reached $2,500.00 you can wait to pay the taxes with your quarterly tax return, Form 941. That’s due on October 31st for all payroll in July – Sept.
So, if this is your first payroll or two, you’re probably in good shape.
Use Form 941 https://www.irs.gov/pub/irs-pdf/f941.pdf . Use Form 940 at the end of the year to file your Federal Unemployment Tax FUTA tax return – https://www.irs.gov/pub/irs-pdf/f940.pdf
You can read all about IRS payroll rules here, in Publication 15, where you will find the withholding tables, too.
https://www.irs.gov/publications/p15/index.html
Again, I urge you to hire a payroll service, like www.paychex.com
But if you really want to do it yourself, you can pick up a copy of a workbook I’ve put together to simplify dealing with payroll, with employees, and accounting for payroll transactions – TaxMama’s Payroll Workshop (Just ignore the page or two about California)
https://www.1automationwiz.com/app/javanof.asp?MerchantID=27884&ProductID=3224021
And remember, you can find answers to all kinds of questions about payroll taxes and all kinds of other tax issues, free. Where? Where else? At TaxMama.com
[Note: If you were subscribed to the e-mailed TaxQuips, you’d be getting other exciting news and tips by e-mail, that never appear on the site. Please click on the subscribe link and join us.]- Ask TaxMama :: Where taxes are fun and answers are free
- TaxQuips :: The number ONE tax podcast online
- MarketWatch – TaxWatch Column :: About how hard it is to get an IRS payment voucher
- IRS Form 941 :: Quarterly Payroll Tax Return
- IRS Form 940 :: Annual Unemployment Tax Return
- IRS Publication 15 :: Instructions for Employers
- PayChex.com :: a payroll service
- TaxMama’s Payroll Workbook :: Detailed instructions and links to forms and resources
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