"9 Steps to Master Payroll for Your LLC"

The article outlines a 9-step guide for LLCs to manage payroll, including obtaining an EIN, registering with state agencies, classifying employees correctly, setting up a payroll system, withholding and paying taxes, filing tax returns, issuing W-2 forms, and maintaining compliance with payroll tax laws.


Step Action Details
1 Obtain an EIN (Employer Identification Number)
Apply for an EIN through the IRS to identify your LLC as an employer. This number is required to report and pay payroll taxes.
2 Register with State Agencies
Register your LLC with your state’s tax agency to report employment taxes. Some states may require additional registrations for unemployment insurance and workers’ compensation.
3 Classify Employees Correctly
Ensure that each worker is properly classified as an employee or independent contractor. Misclassification can lead to penalties.
4 Set Up Payroll System
Use payroll software or hire a payroll service provider to calculate and withhold the correct amount of taxes from employee wages.
5 Withhold Taxes
Deduct federal, state, and local payroll taxes, including Social Security, Medicare, and income tax, from employee paychecks.
6 Pay Employer Taxes
Your LLC must pay its portion of Social Security, Medicare, and federal and state unemployment taxes.
7 File Payroll Tax Returns
File federal forms like Form 941 (quarterly) and Form 940 (annually) as well as state-specific payroll tax forms on time.
8 Issue W-2 Forms
Provide employees with Form W-2 at the end of each year for reporting their earnings and withheld taxes.
9 Maintain Compliance
Stay up-to-date with federal and state payroll tax laws to ensure your LLC remains compliant and avoids penalties.


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