If you have any employees, you’re not only responsible for issuing paychecks on a set schedule, but also for deducting and paying federal, state, and local income taxes to the government. Some people are intimidated by this responsibility, but the truth is that once you have the a payroll system in place, it’s not that difficult to keep it running smoothly. Here are the steps you should take to set up a system that will streamline the process.
Apply for an Employer ID Number
An EIN identifies you as a business entity that’s responsible for paying payroll taxes to the government. According to the IRS, if you have employees (not just independent contractors), you’ll need to apply for one. To do so, go to the IRS website and print out Form SS-4 [PDF] if you plan to submit it by mail or fax. If you are an international applicant, you can apply by phone. You can also complete and submit the form online.