Thread: Payroll processing - hire out or do yourself?

One man operation here. 10 years going and I've had a bookkeeper process payroll for me which includes filing state and fed taxes (payments and forms). She is getting out of the business and she suggested a national company but they charge $67 per month. $800 per year is a lot of money. Additional paperwork on my end each month/quarter is a lot of hassle, though.

Any cheaper options? Is self-pay processing, tax filing, etc not too time consuming?

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Originally Posted by Randall Clark

One man operation here. 10 years going and I've had a bookkeeper process payroll for me which includes filing state and fed taxes (payments and forms). She is getting out of the business and she suggested a national company but they charge $67 per month. $800 per year is a lot of money. Additional paperwork on my end each month/quarter is a lot of hassle, though.

Any cheaper options? Is self-pay processing, tax filing, etc not too time consuming?

Incorporated as S-Corp or as LLC?

S-Corp takes a lot of paperwork and tax preparation (I had an S-Corp previously) and an account was the way to go to keep track of everything and do it on time.

I am now an LLC, MUCH less paperwork.

Both can be pierced, but the S-Corp does offer some additional protection, but not much, whereas an LLC (single member) really offers very little protection in that regards because in a single member LLC, that single member is in charge of everything, so risks everything. Keep in mind that an S-Corp with only one person ... everything is their personal responsibility anyway, so anything done can be directed to them personally.

A multi-member LLC offers much more protection than a single member LLC, get several inspectors you know and work with, form a multi-member LLC, and each operates independently under the LLC, liability of the LLC is based on the percentage of control each member has in the LLC.

The above is not legal advise, I am not a lawyer, but I have spent a few nights in Holiday Inns.

Get legal advise on which is best for you.

Yeah, I know, thread drift ... but it was related to the question.

Originally Posted by Jerry Peck

Incorporated as S-Corp or as LLC?

S-Corp takes a lot of paperwork and tax preparation (I had an S-Corp previously) and an account was the way to go to keep track of everything and do it on time.

I am now an LLC, MUCH less paperwork.

Both can be pierced, but the S-Corp does offer some additional protection, but not much, whereas an LLC (single member) really offers very little protection in that regards because in a single member LLC, that single member is in charge of everything, so risks everything. Keep in mind that an S-Corp with only one person ... everything is their personal responsibility anyway, so anything done can be directed to them personally.

A multi-member LLC offers much more protection than a single member LLC, get several inspectors you know and work with, form a multi-member LLC, and each operates independently under the LLC, liability of the LLC is based on the percentage of control each member has in the LLC.

The above is not legal advise, I am not a lawyer, but I have spent a few nights in Holiday Inns.

Get legal advise on which is best for you.

Yeah, I know, thread drift ... but it was related to the question.

Its an LLC. Don't worry about thread drift, your advice is always good! Thanks for the response.

I use a CPA. Her fees are more than $800/year. She saves me more money than she costs. While I pay my monthly taxes on line, she tells me how much to deposit each month, and takes care of my quarterly filing and taxes.
Use a professional, and you will likely come out ahead, and not get in trouble with iRS or State tax people.

I am S corp. One man show for the moment like yourself.

I have retained a CPA for 3 years. "Much time and money saved."
Roughly $2,000.00 yearly in my neck of the woods.
Pennies when you consider all your business liability.

As well, I use Carson Dunlop DicoverHorizon.
It tracks your inspections, bookings, yearly, monthly and daily gross income and taxes.

Hope that helps.
Wishing you all the best.
Robert

Originally Posted by Jack Feldmann

I use a CPA. Her fees are more than $800/year. She saves me more money than she costs. While I pay my monthly taxes on line, she tells me how much to deposit each month, and takes care of my quarterly filing and taxes.
Use a professional, and you will likely come out ahead, and not get in trouble with iRS or State tax people.

Thanks Jack.
Just transitioning over to monthly taxes.
Damn, I hate the large yearly output. Five figures this year.

As an LLC you still need to pay quarterly estimated taxes on what you made, and 'what you made' versus 'what you brought in' is where the accountant comes in.

The advantage of the LLC is that it goes on your 1040 form instead of its own tax forms.

A whole lot more paperwork, taxes, and time for an S-Corp.

I have a local bookkeeping service do my monthly stuff and a CPA do the annual tax stuff. I take care of the deposits, the bookkeeper takes care of payroll, bank reconciliations, etc. For me to do it would require the loss of at least one inspection per month. I can make 5-10 times as much on an inspection as I pay her. Money well spent and I don't have the headaches. I prefer the local over the national. As a local, independent inspector, I would rather support the local independent companies to the extent that I can. I prefer to not go with national companies.

Originally Posted by Gunnar Alquist

I prefer the local over the national. As a local, independent inspector, I would rather support the local independent companies to the extent that I can. I prefer to not go with national companies.

Agreed.

The accountant (CPA) I used for my S-Corp was a local company, she worked for a larger firm, she has since started her own CPA accounting firm. Our daughter, who started her own law firm a year or two ago, uses that same accountant.

Well worth the cost.

I do it myself, but I don't mind doing that type of stuff.

If you are a one man show, why are you doing payroll at all?

Originally Posted by Jim Robinson

I do it myself, but I don't mind doing that type of stuff.

If you are a one man show, why are you doing payroll at all?

Taxes?

Originally Posted by Jack Feldmann

Taxes?

Yes. State and Fed require quarterly filings the way mine is structured.

The most important thing about hiring someone for payroll processing is the fact that you can save time. Doing payroll by hand is the least expensive payroll option. You don't have to pay a professional or purchase a program. When you manually run payroll, you have full control over your payroll. But, doing payroll yourself likely means you don't have someone to check your calculations. If you're looking for payroll software, at https://www.thepaystubs.com/blog/human-resources/best-payroll-software you can find all the information you need about the 6 best payroll software to try in 2021. Processing payroll is not just about doing the hard sums and keeping careful records. You'll also need to keep up to date with the latest tax rules and regulations.