As a business owner, you are required to track each time you take money from your business profits as a draw or owner salary payment for the purpose of calculating the Estimated Quarterly Self-Employment Taxes you will owe to the IRS. You will setup an EFTPS (Electronic Federal Tax Payment System) account with the IRS. It is recommended you set aside approximately 30% of the money you take for your tax payments. Your IRS payments will include Federal Income, Medicare and Social Security tax. Self-Employed business owners are responsible to pay both the employer and employee portions of Social Security and Medicare tax in addition to Income tax. Our firm creates monthly journal entries to record the salaries or draws that business owners take. We calculate the estimated self-employment tax and provide a monthly amount to pay to the IRS. We create bills in your QBO account to book your self-employment tax liabilities and send reminders of tax payment due dates. While we understand that these payments are due on a quarterly basis, it is recommended you make monthly payments to better manage your business cash flow. For more information on self-employment tax please visit this link: Self-Employed Individuals . To setup your EFTPS account with the IRS please visit this link: Setup EFTPS Account
Your Accountant Creates Quarterly Estimated Tax Liability Reports
With Lend A Hand Accounting, your accountant calculates and tracks the self-employment taxes you that you will owe to the IRS each quarter based on your monthly owner salary or draws. A custom report is created and uploaded into the From My Accountant folder located within your secure document upload portal. This report is used to file and pay your EFTPS payments. Our clients make their own EFTPS payments on a monthly recurring basis and file their own quarterly returns with State agencies such as Employment Security if they have not selected Full-Service Payroll in QuickBooks Online. Your accountant will match money spent that comes through your bank feeds to the bill entries made to book your self-employment tax liabilities. The process of creating monthly journal and bill entries for your owner salary or draws creates expenses on your Profit and Loss report, as well as equity and liability transactions on your Balance Sheet. The outstanding liabilities on your Balance sheet are cleared when IRS payments are matched to bill entries.
Your Accountant Reconciles Owner Equity and Payroll Liabilities
With our Owner Salary or Draw Posting Service, your accountant reconciles your self-employment expenses, owner equity and tax liability account distributions each month. The transactions in these accounts are compared with your quarterly or monthly tax payments, and validated against your Profit and Loss and Balance Sheet reports. When IRS tax notices are received, they are uploaded into a folder within your secure document upload portal. Any IRS tax notices received will be reviewed by your accountant. Signing a tax authorization form will allow your accountant to contact tax agencies on your behalf.
Accounting and Bookkeeping Support by a QuickBooks ProAdvisor Program Member
I founded Lend A Hand Accounting because I believe accounting and bookkeeping services should be affordable, efficient, and flexible. We use flat fee pricing, which makes our accounting services a comfortable fit for any budget. At Lend A Hand Accounting, we’ve found a formula that really works! You select the accounting services you need, and control when you want to start or stop services. It is all in your hands! We’ve cut out the need for endless phone calls and long trips to the accountant’s office.
Feel free to call or text me now at 360-637-4799. We can also get started right away. Go ahead and create a free account and we can automatically look at your books and let you know where you stand.
We really appreciate your business and look forward to serving all of your accounting and bookkeeping needs. Thanks again!
The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.