Learning to Do Withholding is Not That Difficult

It is not that hard to go into business for yourself. However, making it profitable and fully legal is another story. You do need to check out what licensing, bonding or insurances you may need. You also need to check out about the laws for naming your business. I have found that in my state, if you pick any name other than your real name, then you have to go through registering your business. If you hire an employee, make sure you abide by the rules for payroll deductions. You can click here for a website that makes pay stubs you can keep track of.

Withholding is really not much of a problem. You should apply for a federal employer identification number to put on the forms you give your employees including their paystubs. The deductions you need to make can be found in booklets the IRS publishes. Then you have to do your state withholding and sometimes local too. Figuring out how much to hold back is not really a problem. You should keep this money separate and submit it on time. Otherwise, you can face some penalties, fines and even legal action. Never, use a penny of withholding for anything else than submitting it to the proper government authority.

It does not take a lot of time to fill out paystubs for a few employees. The paperwork is really no more difficult than keeping track of a checking account. It may seem daunting at first, but it really is quite routine. You have the unemployment insurance and other deductions you need to make too. Just look at a paystub example or a W2 form to remind you of what needs withheld. You should consult an accountant if you get stuck. In order for me to save expenses and actually be able to afford an employee, I learned a lot of this stuff on my own.

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