Payroll Taxes?????

Discussion in 'Business Operations' started by RyanCanMow, Oct 29, 2002.

  1. RyanCanMow

    RyanCanMow LawnSite Member
    Messages: 35

    This may be a stupid question, but how do you go about setting up payroll taxes for an employee?
    I am planning to hire employees one day. Someone in the construction business told me that I am not required to pay payroll taxes unless I gross over 250K per year. I am in Mississippi, and I am lost as to figuring out how to get set up to pay payroll taxes and what type of record keeping is required. Please help!
  2. John Allin

    John Allin LawnSite Bronze Member
    Messages: 1,488

    You've been given some missinformation.
    Call an accountant and ask the question over the phone.
    If you have to make an appointment, so be it.
    Shouldn't cost you more than $50 for their time to answer these types of questions.
  3. bruces

    bruces LawnSite Senior Member
    Messages: 648

    There is no lower limit for paying payroll taxes. There are several criteria for determining if an individual is a contractor or an employee. If you hire someone to work for you, direct their actions, set their hours, furnish their equipment, etc., they will most likely be an employee subject to payroll taxes.

    As John said, talk to an accountant, they can advise on what id numbers you need for your state, proper procedures, recordkeeping, etc.

    What you save in potential headaches and penalties will be well worth what ever the fee might be.

    You probably don't need to do anything until you are close to hiring an employee.

    Once you have an employee or employees, software such as Quickbooks can make the payroll process relatively painless if you have a basic understanding of the process.
  4. JimLewis

    JimLewis LawnSite Fanatic
    Messages: 6,876

    Like John said, you've been majorly misled. That's not true at all. You are liable for payroll taxes, workers' comp., and more with any number of employees.

    First thing you need to do is get an EIN (Employer ID Number) from the Feds. An internet search will lead you to how to get one. It's simple.

    From there, there are a few ways to handle payroll. First, you can figure it all out yourself with booklets that are complex and archaic as heck from the government. Next, you can use Quickbooks to do payroll for you. Third, you can hire an accountant. And finally, you can hire a firm who specializes in payroll.

    I can't emphasize enough how much I recommend option 4 - a payroll company. Mine charges me about $120 per month for 7 employees and they take care of my payroll, my employment tax deposits, my quarterly tax reports, and my year-end tax reports. WELL worth it.

    The only reason this is a better option than #3 (an accountant) is that Payroll companies specialize in JUST doing payroll and are set up to do it very cheap. An accountant is not and will not do it for cheap.
  5. AztlanLC

    AztlanLC LawnSite Bronze Member
    Messages: 1,051

    Or you can have both, (accountant and payroll service) Use quickbooks basic payroll, it does all the calculation you just have to put how many hours the employee worked that week and does the check, then you send a copy of your data to you accountant to do all the reports. Last year I paid about $600.00
    for accounting and payroll fees (not liabilities)
  6. JimLewis

    JimLewis LawnSite Fanatic
    Messages: 6,876

    Wait, why would you use an Accountant AND Quickbooks? If you are already paying the fee to use the Quickbooks for payroll, there's no need to have an accountant do the reports. Quickbooks has all of the information already there. You just hit the button that says, "Process Form 941" or "Process W-2", etc. It just takes the data you've already entered and creates the reports for you in like 5 seconds. No need for an accountant.
  7. bruces

    bruces LawnSite Senior Member
    Messages: 648


    What you say is logical. But, I see clients all the time that do their own payroll but are terrified of actually doing the payroll tax reports.

    They don't want any responsibility for doing anything related to takes themselves. A lot of people just want some one else to look it over and take the responsibility.

    And you are right, it is a breeze with Quickbooks if you set it up right to start with.
  8. JimLewis

    JimLewis LawnSite Fanatic
    Messages: 6,876

    Ok. But I don't think when you have an accountant process your reports for you it relieves you from responsibility or liability any more than if you had Quickbooks do it for you. You still have to sign the report before you send it in, which makes you liable for the whole thing.

    I am aware of that fear. I just think it's an irrational one.
  9. bruces

    bruces LawnSite Senior Member
    Messages: 648

    You are 100% correct Jim, but a lot of people just freak out at the thought of dealing with any type of taxes on their own.

    If an accountant does it for them, they feel like it must be right and don't have to worry about it.
  10. lawnworker

    lawnworker LawnSite Senior Member
    Messages: 897

    I was going to post a tread about pay roll this morning, so I might as well put it here. First, how much does Quik Books cost including user fees per month?

    Second, if one uses workers only occasionally, is there any way to not do a payroll and still get a legal tax deduction for the workers pay? I know temp workers is a option, but their rates or sorta high and one never knows what type of worker you get. I was thinking--- say you have a big job and you set the contract up so in the final payment the customer pays your helper his share without the money going into my hands, then only claim on my profit after materials because labor would in effect not be my exspense.

    Also, if one does have employees that work every now and then and say--- one has several like this, would setting up multiple payroll accounts for those employees be feasible.

    Flexable workers could help a one man show grow into somthing bigger ,I would like to grow bigger are get out of this business all together. Working by myself is getting old . I find I am more of a people person then I used to be and I dont like being by mysel a lot any more

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