In This Chapter
Requesting an employer ID number
Obtaining withholding information
Computing an employee's gross wages, payroll deductions, and net wages
Recording a payroll check in QuickBooks
Making federal tax deposits
Preparing quarterly and annual payroll tax returns
Producing annual wage statements, such as W-2s
Handling state payroll taxes
Payroll is one of the major headaches of running a small business. When I think of all the time that I've seen clients waste figuring out withholding amounts, writing checks, and trying to fill out comically confusing payroll tax returns, it just makes me want to scream. Fortunately, QuickBooks helps. And in a big way. In this chapter, I explain how.
However, before I launch into a discussion of doing payroll using QuickBooks, I want to share an accounting thought that's almost heretical. You may not want to do payroll yourself using QuickBooks. No, wait, hear me out.
The easiest way to do payroll, quite frankly, is to sign up with an outside service bureau, such as ADP or Paychex. If you have an accountant, you might also want to ask him or her about other less-expensive, local payroll services.
Of course, the easiest route is often the most expensive, and payroll services are no exception. In my experience, these full-meal-deal services tend to run about twice the price of the most expensive QuickBooks Payroll service after you add everything up, but all you need to do is ...