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Megan C
Megan C , Certified Public Accountant (CPA)
Category: Finance
Satisfied Customers: 16539
Experience:  Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level
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I have recently installed QuickBooks for my business and learning

Resolved Question:

I have recently installed QuickBooks for my business and learning curve is unfortunately slow. Accounting has been fairly simple up until recently when I employed a worker for the past few months to help out with the office. I have been paying her in cash without any payroll deductions and I would like to start doing things right. She is interested in a home loan and one of the requirements is to demonstrate income by means of paystubs. The questions I have are:
Having employed her for about 3 months, what do I need to do be in compliance with Tax and employer requirements? I know I am required to withhold moneys and then send off to uncle sam, but I don't understand how frequently this needs to happen. I seem to remember that this needed to be done Quarterly. If so, then I still have time to report her income the way it should? If so, I suppose I can prepare paystubs for the past three months and then arrange sending off the withholdings to pay off the different payroll deductions.
As you can see, I need to understand the basics and hopefully you can recommend some resources (on the web perhaps) where I can learn how to calculate these payroll deductions and how to send them to uncle sam. I am also interested in learning if I still have time to report income for these past 3 months or am I in a bind right now for non-compliance?
Submitted: 3 years ago.
Category: Finance
Expert:  Megan C replied 3 years ago.

MyVirtualCPA :

Thanks for your question, and thanks for using JustAnswer.com

MyVirtualCPA :

I don't think you are in any sort of bind. You have one employee, and have only been paying them without withholdings for about three months.

MyVirtualCPA :

So, there's not much tax that will be due on your part

MyVirtualCPA :

The best advice would be to get software that does all the work for you. I think Quickbooks has a payroll module and your Quickbooks ProAdvisor could get you all set up.

MyVirtualCPA :

With small payroll as you describe, you would only have to pay your taxes quarterly and with your return

Customer:

Hello!

MyVirtualCPA :

So, you would need to file your payroll report for the period ended in June fairly quickly

MyVirtualCPA :

You will fill out form 941

MyVirtualCPA :

In addition use the withholding tables to determine how much should be withheld from your employee's check for their federal payroll

MyVirtualCPA :

Then get a W-4 from them

MyVirtualCPA :

Here's the employer tax guide: http://www.irs.gov/pub/irs-pdf/p15.pdf

Customer:

Ok, it seems that the hire date coincides with the last quarter... DO you know when the due date to file payroll report is?

MyVirtualCPA :

You could enlist the help of a local bookkeeper on a freelance basis for this, They shouldn't charge you more than $100-$150 which would be worth it to get set up straight

MyVirtualCPA :

July 31

Customer:

For July 31 I would have to report payroll for the Months of April, May and June?

MyVirtualCPA :

Correct

Customer:

Great...

MyVirtualCPA :

So, you're good :-) No worries

Customer:

If I knew how to calculate payroll deductions, I could in theory come up with the Stubs and give them to my employee...

MyVirtualCPA :

From here on out I would get set up in quickbooks. It will calculate everything for you

MyVirtualCPA :

That's why you should get a contractor in to look at this, get it set up, and clean up your mess

Customer:

Assuming they were correct, I could just go to the Bookkeeper and request help for setting up the structure to continue to make payments regularly

Customer:

Haha... indeed a mess it is...

Customer:

I am sympathetic to my employee's interest in purchasing a home.. which is why I would like to get her some paystubs..

MyVirtualCPA :

Yes, but you see this isn't a huge mess like you might imagine

MyVirtualCPA :

This happens to people who have many employees

MyVirtualCPA :

then they must clean up a collossal mess. It's not so bad when it's just one employee

Customer:

Thank you for putting this in context.. I feel better about the situation... it is an advantage that I have some time to file..

Customer:

Would you recommend any of those Tax Returns places like H&R BLock or Liberty ? Or should I search for a local accountant?

Customer:

As you mentioned, I would love to get this setup in Quickbooks... I just don't know how it works...

Customer:

I did in fact purchase the Payroll module and it is there... I just fear my learning curve will not help me get everything setup in time..

Customer:

I am thinking of creating stubs and sending payroll report outside of quickbooks for now, until I learn the software.. unless of course some expert can help me set it up..

MyVirtualCPA :

I would search for a Quickbooks ProAdvisor in your area

MyVirtualCPA :

They will set it up and train you on it

MyVirtualCPA :

And they will also clean up your mess for you

MyVirtualCPA :

Shouldn't be too expensive

MyVirtualCPA :

I would search locally, like an independent bookkeeper. They will be more reasonable

Customer:

Ok... Thank you for your assistance. I will see what I can find locally!

Megan C and other Finance Specialists are ready to help you
Expert:  Megan C replied 3 years ago.
Thanks, Jose for your positive rating. Please come back and visit MyVirtualCPA for any of your finance needs. It was a pleasure working with you today.

Thanks again!