I have used an accountant to run my payroll last yr. I dont want to use one this yr. I am a single member LLC?

Question

I want to earn Socialy security credits, Hence want to run a payroll anually. I pay estimated tax. Can I run my own annual payroll? I want to run it manually. No s/w please. If I know the Medicare, SS, FUTA tax percentage guidelines, Can I do it myself? pls explain with an example. Assume my gross salary is $4000. Can you break it down and let me know my net Income. Thanks in advance

Answer 1

Of course you can run your own payroll..however, make sure you know the proper percentages to take out for, state taxes, federal taxes, and the meanie of all...workmans comp...Me being a licensed paint incorporation, small time but incorporated none the less I prerfer to be incorporated versus LLC....Incorporation..which you only need yourself to do so, has a few other benefits over LLC..make sure if you file for incorporation, to turn around and file afterwards within a few weeks allowed, what is called a s-2 incorporation...this is a seperate motion to file once yyou get your tax id number, and the taxes you pay will be cut in half this way...Depending on the nature of your buisness..I find it is cheaper and safer to do what is called "sub contracting" to other licensed contractors that are workmans comp exempt and have to carry thier own general liability..It cost me simply around 300.00 to incorporate, get my counties occupational permits, pay for my tax exempt for 2 years..and start my general liability which covered 300k in liability..This was for the state of Florida.. If you need further help with this..feel free to e mail me and I will discuss further...I have helped many people get incorporated usually for around 100.00 to do the leg work,,,can have you incorporated within 2 to 5 days... I will give you instructions how to via e mail/messenger for free..only if I do the actual work is it at a cost..Workmans comp is the worst part of deductions that will cost you..whatever each employee has to pay in out of his check you have to match that ammount for every employee..workmans comp exempt sub contractors are responsible for thier own taxes etc..simply mail them a 1099 zt the end of the year

Answer 2

You can run payroll for your employees, but not for yourself. Employees must be paid no less frequently than once a month so it's not possible to run payroll annually. Your income is taxed via Schedules C and SE. Schedule SE is where you pick up your Social Security credits.

If you paid yourself through payroll your taxes would actually be HIGHER than if you paid your taxes through Schedules C and SE. This is becuase you would be paying FUTA and state unemployment taxes on your own income if you were on your own payroll whereas you do not pay those through Schedules C and SE.

Since you are a single member LLC there is no need to bother with the expense and hassle of running payroll if you have no employees. It would be a needless waste of time and money. Just continue to make your quarterly estimated payments on Form 1040-ES as well as whatever state estimated payments are required by your state.

If you insist on paying yourself through payroll you'll have to reorganize your business as an S-Corp or C-Corp. For the life of me I can't see any benefit for doing this since your costs will be higher with no benefit to you personally. You'll have to run payroll at least monthly and make the monthly payroll deposits both to the IRS and the state tax authorities. And you'll be paying FUTA and state unemployment taxes on your own wages which you don't have to pay if you compute your taxes on Schedules C and SE as you should be doing presently.

Answer 3

I use quickbooks payroll feature. It works fine