How do you pay the IRS for your employees?

**adirondak** · 02-25-2010 06:46 PM

Well my website is set up - business lines and emails set up, all ducks lined up in a row. Now to hire my workers, who will be independent contractors, and a phone person, who will be in house.

My question is - how do you know how much to set aside for taxes, where do you set it aside, and how do I pay the taxes on my phone person's salary?

Is it best to hire an accountant? It seems with only one in-house employee that it would be a waste.

Any ideas?

**tenuk** · 02-25-2010 07:36 PM

Originally Posted by adirondak

Well my website is set up - business lines and emails set up, all ducks lined up in a row. Now to hire my workers, who will be independent contractors, and a phone person, who will be in house.

My question is - how do you know how much to set aside for taxes, where do you set it aside, and how do I pay the taxes on my phone person's salary?

Is it best to hire an accountant? It seems with only one in-house employee that it would be a waste.

Any ideas?

Personally, I hired an accountant. Taxes are their area of expertise and who knows they may be able to advise you of certain tax advantages/benefits/credits, etc you may not have been aware of.

Does your employee only answer the phone? If so have you considered hiring a virtual assistant? Would be less costly and you usually get a dedicated team assigned to handle your business calls. Haven't used one myself but been researching it

**adirondak** · 02-25-2010 07:54 PM

I'm operating out of pocket starting out - so I'd like to do this myself if possible at least until we get a little steam going. Is that feasible?

**tenuk** · 02-26-2010 09:28 PM

Originally Posted by adirondak

I'm operating out of pocket starting out - so I'd like to do this myself if possible at least until we get a little steam going. Is that feasible?

Yeah you should be able to do that. Reading and research about your local tax laws, processes etc can only benefit you. Might even be able to find a Small Business Tax 101 course somewhere around town where you're at.

Here in Toronto we have a toll free Small Business Hotline offered where you can call for assistance. You got something like that where you're at, they might be able to give you some advice too

**JohnYE** · 02-26-2010 11:01 PM

I think a VA is a great idea. Check out VirtualAssistants.com. You can hire someone on a very part-time basis, or as much as you need, and you'll save the expense of an accountant as well as the time and expense it takes to do it yourself. As an entrepreneur it's important that you are able to focus on what you do best. My rule in business has always been to avoid employees until absolutely necessary. There are so many ways employees can distract from what you are trying to accomplish, from finding good help to training, dealing with personnel (and personal) issues, etc... it's a lot to take on when you're starting out.

That's my two cents. Good luck to you, and keep us posted.

-John

**DangerousCurves** · 03-06-2010 06:34 PM

if you're going to be paying wages, contact the irs and apply for a federal EIN# (employer identification number) and depending on what state you're in, you'll need to register with your state as well. They will give you the info on what deductions you'll be required to hold from your employee's check, and how and when you'll have to pay it. Most commonly, payroll taxes get filed and paid quarterly for both federal and state. Hiring an accountant is not a bad idea, but you can do it yourself if you're up to it. As much as the irs is often viewed as the enemy #1 of business owners, their customer service staff are extremely helpful in getting you setup and on the right track.. don't hesitate to call them if you have a question.. it's far better to get the right answer from the get go, than to have your assets seized for screwing up your paperwork.

**noob** · 03-07-2010 05:33 AM

Its better to get someone familiar with doing payroll to do it for you whether that is a payroll service or an accounting person or even a book keeping firm/individual who has experience in this area.

I outsource this to a local firm as it was much easier than to do it in-house unless you have a very large company (mine had 14 employees). Taxes and payment varies depending on your location and local law but for us we paid monthly on the 15th of each month for the previous month worth of taxes that were deducted from the employee's payroll along with employer taxes. This of course may differ depending on where you're located.

**kody.abbott** · 03-07-2010 03:46 PM

Just hire them as independent contractors then they just report their earnings themselves and you just fill out a 1099-MISC. just Google it to find out more about it