Author Topic: Cheapest easiest way to run extremely small payroll, how to pay children?  (Read 12252 times)

SomedayStache

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I would welcome any advice on running a very small payroll!
My spouse is sole-proprietor of a small business with no employees (therefore no payroll). We have teenage children that do legitimate work in the business and have been just giving them cash to help him - but I would like to start officially paying them. This would both give the business a write-off and open up some possibilities for the kids. It seems that we do not have to pay social security taxes, Medicare taxes or FUTA taxes for children under the age of 18. But we do have to withhold income taxes. https://www.irs.gov/businesses/small-businesses-self-employed/family-help
  • Q1) What is the simplest/cheapest (free!?) way to pay their federal and Oklahoma state income taxes? Can this be done manually? If so - how?
  • Q2) Later this year we'd like to hire some extremely part-time help. We would have done this already, but I have no idea how to run payroll and that has been a blocker. Also the business is not very profitable and adding a monthly recurring fee to *occasionally* run payroll is disheartening.

Possibly relevant info: We use Square to sell our merchandise and send invoices. We use QuickBooks online for accounting and coordination with our CPA at tax-time.

Michael in ABQ

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I would welcome any advice on running a very small payroll!
My spouse is sole-proprietor of a small business with no employees (therefore no payroll). We have teenage children that do legitimate work in the business and have been just giving them cash to help him - but I would like to start officially paying them. This would both give the business a write-off and open up some possibilities for the kids. It seems that we do not have to pay social security taxes, Medicare taxes or FUTA taxes for children under the age of 18. But we do have to withhold income taxes. https://www.irs.gov/businesses/small-businesses-self-employed/family-help
  • Q1) What is the simplest/cheapest (free!?) way to pay their federal and Oklahoma state income taxes? Can this be done manually? If so - how?
  • Q2) Later this year we'd like to hire some extremely part-time help. We would have done this already, but I have no idea how to run payroll and that has been a blocker. Also the business is not very profitable and adding a monthly recurring fee to *occasionally* run payroll is disheartening.

Possibly relevant info: We use Square to sell our merchandise and send invoices. We use QuickBooks online for accounting and coordination with our CPA at tax-time.

We use Gusto for our payroll. It's about $40/month and $6 per additional employee. Our two oldest kids are on payroll and I put half their net earnings into a Roth IRA. We do withhold payroll taxes since we're an LLC (S-Corp), but since they both make maybe $1,000/year we don't withhold any income tax at the state or federal level and mark them as Exempt from Withholding. https://www.irs.gov/help/ita/are-my-wages-exempt-from-federal-income-tax-withholding The key number seems to be $1,300 or less of income (and that they are dependents).

Affiliate referral link if you're interested - you get $100 back.
https://gusto.com/i/michael67834

I'm sure there is a way to do some of this manually, but it may not be worth it in the end if you're spending hours to try and be compliant.

SomedayStache

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Gusto pricing sounds somewhat similar to what Square and Quickbooks would charge.
Sadly even $40 a month doesn't seem worth it for a business that is barely scraping by.

I should figure out if that's something we can turn on and off as needed, during the months we would not be paying for any help.

geekette

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Way back (and I do mean way back) I worked as a bookkeeper for a travel agency.  We had withholding tables and sent taxes in to Fed and State quarterly.  Seems like it can still be done. 

Gusto, mentioned above, even has a page on DIY payroll here

BC_Goldman

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I used to do bookkeeping work for a small non-profit with only one paid employee (not me). Payroll was a manually written check with the deductions withheld and quarterly filings with state/fed to pay withheld taxes. Federal, I used to call a phone number and make the payment thru the EFTPS. State was an online filing debited from the checking account.

SeattleCPA

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Way back (and I do mean way back) I worked as a bookkeeper for a travel agency.  We had withholding tables and sent taxes in to Fed and State quarterly.  Seems like it can still be done. 

Gusto, mentioned above, even has a page on DIY payroll here.

If the gusto charge is too much to afford honestly think you should not do payroll for kids. It's very easy for diy payroll mistakes to cost you a lot more than that.

leevs11

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I would welcome any advice on running a very small payroll!
My spouse is sole-proprietor of a small business with no employees (therefore no payroll). We have teenage children that do legitimate work in the business and have been just giving them cash to help him - but I would like to start officially paying them. This would both give the business a write-off and open up some possibilities for the kids. It seems that we do not have to pay social security taxes, Medicare taxes or FUTA taxes for children under the age of 18. But we do have to withhold income taxes. https://www.irs.gov/businesses/small-businesses-self-employed/family-help
  • Q1) What is the simplest/cheapest (free!?) way to pay their federal and Oklahoma state income taxes? Can this be done manually? If so - how?
  • Q2) Later this year we'd like to hire some extremely part-time help. We would have done this already, but I have no idea how to run payroll and that has been a blocker. Also the business is not very profitable and adding a monthly recurring fee to *occasionally* run payroll is disheartening.

Possibly relevant info: We use Square to sell our merchandise and send invoices. We use QuickBooks online for accounting and coordination with our CPA at tax-time.

Have you checked out Justworks?