Tag Archives: IRS

Growing Your Small Business: What Entities Do You Need to Pay?

As a small business owner, it’s critical to understand what entities you need to pay as you add employees and grow your business. This can be tricky and complex! The following post comes from our Lead Accountant, Adrienne Kaylor, our resident expert of all things payroll.

Growing Your Small Business: What Entities Do You Need to Pay?

Most small businesses need to hire employees at some point, especially if they are looking to grow. As an employer, it is your responsibility to withhold certain taxes from employee’s paychecks and forward to the government on their behalf. There are also payroll taxes that you, as the employer, must pay. Here’s a list of government agencies you should be paying if you have employees.


941 Tax Deposits – form 941 is used to report the federal withholding, social security and medicare withheld from employee’s paychecks, as well as the employer portion of social security and medicare. The IRS requires employers submit these taxes electronically either monthly or semi-weekly, depending on your pre-determined schedule. The 941 form can be filed quarterly.

940 FUTA – form 940 is used to report & pay Federal Unemployment Tax. FUTA is paid entirely by the employer and is due annually, unless your liability during the year reaches $500. Once your liability reaches $500 for the year, you are required to deposit at the next quarterly due date.

State Unemployment

WASUI – Here in Washington State, we pay unemployment insurance to the WA Employment Security Department. WASUI is paid entirely by the employer for each employee’s wages up to $47,300 (also called the Taxable Wage base for 2018) and is due quarterly.

If you are located outside of Washington, check with your state unemployment agency on their regulations and rates for your employees.

Workers Compensation Insurance

WA Labor & Industries – In Washington State, our workers compensation insurance is a state-sponsored program through WA Labor & Industries. Rates are determined by your risk class multiplied by hours worked and is due quarterly. You can deduct a portion of the premium from employee’s paychecks to reduce the employer burden.

Not all states require workers compensation. If it is a requirement in your state, check with the agency to determine if there is a state-sponsored program. If not, you can obtain a workers compensation through a private insurance carrier.

Are you an employer that needs help with these taxes? Joy Accounting has payroll tax specialists that would be happy to help you. Please call us at 425.213.4862!

Managing the Small (but Critical) Pieces of Your Business: The W9/1099 Dance

As a small business owner, there are so many ‘small’ things to keep track of with ‘large’ consequences attached if you drop the ball (or simply aren’t aware of a particular requirement). At Joy Accounting, we have expertise in these requirements so that you can focus on what you are good at – building your business – while we take care of the details that ensure your company hums along smoothly (and without unexpected calls from the IRS!).  Today’s post on the ‘W9/1099 dance’ is from Adrienne Kaylor, Lead Accountant at Joy Accounting. Enjoy!

What You Need to Know for the W9/1099 Dance

As accountants, part of our job is to be sure we track the many moving parts related to running a business. Often, business owners are doing their best to keep up with the important items, and invariably some of the smaller pieces get lost in the shuffle. Collecting W9 forms from vendors definitely falls into this “smaller pieces” category. However, if you are facing a fine for not properly issuing 1099’s to your vendors, it will seem anything but small!

So why are W9’s so important? Because they are necessary to obtain the correct information for you to properly issue a 1099 to certain vendors at year end. The 1099 is also submitted to the IRS, which then uses it to track income for each Tax Payer Identification Number (i.e. SSN for individual/sole proprietor or FEIN for LLC/Corporation/Partnership). If your vendor reports income received from you, but you did not submit a 1099 to the IRS, you could potentially face fines.

As of 2017, the IRS requires 1099’s to be issued for payments equal to or exceeding threshold of $600 during the year. Ideally, you would get the W9 form before issuing your first payment to the vendor, even if it’s less than $600. This is because you may pay that vendor again, later in the year, putting the amount over the $600 threshold.

The most common are independent contractors (such as marketing professionals, accountants, web designers, etc), lawyers, and rent to landlords. Payments that do not require a 1099 include merchandise, utilities, freight, or rent made to a real estate agent. Generally, the IRS does not require you issue a 1099 to a vendor if it is a corporation. Before you issue 1099’s, it’s always best to check directly with the IRS to brush up on the most recent requirements, in case there are recent changes.

If you are a business owner who wants to get these small (but critical) items off of your plate, it may be time to enlist some help from a specialist like Joy Accounting Services!