If you are self-employed and looking for some instruction on payroll preparation it can be tricky to say the least. Most people don’t realize that even if you don’t have employees you may still need to prepare required payroll documents and submit to the Government, per various payroll regulations.
Small Business Payroll Taxes for 2017
Even if you don’t hire anyone you still have one employee, “yourself” that you have to report to avoid penalties and interest. Thus, with or without employees you may have various payroll tax obligations or face some significant penalties if not remaining in compliance with the various self employed payroll preparation rules and regulations.
QuickBooks offers a free payroll trial program that is a great tool we recommend checking out.
The manner in which you operate your business will determine the type of payroll tax obligations you will have. For examples, if you’re a C corporation or an S corp you have to pay federal taxes on your annual salary. If you don’t incorporate you won’t have the same basic payroll tax obligations but you will have close substitutes. As you see this starts to become technical and quite complex.
FICA & SECA taxes
Further, if you make at least $400.00 from your company annually you are required to pay self employment taxes, also known as SECA taxes. Self employment taxes are similar to FICA taxes if you worked for someone but SECA taxes are applied for people who are business for themselves. So for partnerships, LLCs and sole proprietorships the self employment tax is based on your total next self employment income. This is just your total business revenue minus your total deductions.
Self employment taxes are made up of Social Security tax and 2 types of medicare taxes. The SS rate is 12.4% and medicate rate of 2.9%.
Quickbooks online is constantly updating any changes to these amounts as the Government is continuously changing rates to ensure you remain in compliance with all rules and regulations. For self employed payroll preparation we highly recommend using the Quickbooks free trial offer. It’s simple to use and keeps you in full compliance with all Governmental payroll laws and regulations.