I am the C.F.O of an  upstart computer corperation. I just need to
konw how exactly do I know how much to take out of each one of my
employees check each pay period?

The Internal Revenue Service (IRS) instructions for withholding are
covered in a 64-page booklet titled "Publication 15, Circular E,
Employer's Tax Guide" (revised January, 2002).  It's available on-line
in PDF format and includes schedules for different salary levels:
http://www.irs.gov/pub/irs-pdf/p15.pdf 

IRS instructions cover withholding for Federal Income tax, Social
Security and Federal unemployment taxes.  Note that the IRS
information includes only FEDERAL taxes -- you'll want to contact your
state and local Departments of Revenue for information on their
requirements.

In starting the process, employees need complete a W-4 form, which
allows an employee to adjust withholding taxes to account for their
likely tax obligation.  (Note that you have different requirements if
employees are not U.S. citizens.  These are noted on page 13 of
Publication 15).  A good place to start is the IRS "Withholding
Calculator" page, which has an Internet-based calculator that reflects
the W-4 form itself.  When the results are printed from the
withholding calculator, it's pretty easy for employees to fill out the
W-4 form:
http://www.irs.gov/businesses/display/0,,i1%3D2&genericId%3D14807,00.html

For an overview of the federal programs and small business, this IRS
"Small Business/Self-employed" page covers some other requirements for
employees:
http://www.irs.gov/businesses/small/display/0,,i1%3D2%26i2%3D23%26genericId%3D20196,00.html

A more general resource page on the IRS site for small business is
this "One-stop Business Resource" page, with a broad range of links to
record keeping; tax; and tax credit issues:
http://www.irs.gov/businesses/small/display/0,,i1%3D2%26i2%3D23%26genericId%3D20005,00.html

Best regards,

Omnivorous-GA

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Request for Answer Clarification by bdw0617-ga on 20 Sep 2002 06:57 PDT

is there by chance someone can tell me the actual address I can send
form 2553 in to the IRS to? I have tried to fax it to them for the
last week.

---

Clarification of Answer by omnivorous-ga on 20 Sep 2002 08:08 PDT

The "Instructions for Form 2553" list two addresses for the Eastern
and Western U.S. tax centers.  The 5-digit zip code and "IRS" are all
that's needed to get to these two mail centers:

Internal Revenue Service
Cincinnati, OH  45999

or 

Internal Revenue Service
Ogden, UT  84201

The full instructions are in Adobe Acrobat format here:
http://www.mycorporation.com/resolutions/irs/i2553.pdf

Good luck with the start-up work!

Best regards,

Omnivorous-GA

---

Clarification of Answer by omnivorous-ga on 21 Oct 2002 20:05 PDT

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if it met your needs!

You should also be aware that you will not only need to withhold taxes
from your employees' paychecks, you will have to fill out a
significant number of reporting forms and submit these to the IRS, as
well as to the Department of Revenue for the state(s) -- and possibly
the city(ies) -- in which you do business. Large companies do this via
complex computer payroll software. The IRS will permit you to fill out
the paperwork by hand, but there are also reasonably-priced
small-business software payroll and/or packages available that could
make your life a lot easier.

Either way, be sure that you read the IRS documentation and follow it
carefully. There can be *extreme* financial penalties for not getting
it right!

Best wishes!

could you give me the name of this software? the money isn't an issue,
anyting that can save me time i am for it..

The first packages I will mention are Intuit's QuickBooks
(www.quickbooks.com) financial accounting software for small business
and TurboTax reporting software.

This is purely my own subjective opinion, because I have used Intuit's
Quicken individual financial and TurboTax tax reporting packages for
several years now and really LOVE them. I can download and import my
bank transactions from my online banking account (saves having to type
each check or debit individually). Quicken has a great Reconcile
feature that helps me to balance my checkbook quickly and easily each
month. I don't use Quicken to print checks to pay bills, but that
feature exists. I can assign a category to every transaction, then
create and print reports that show me where I am blowing all my money.
Then TurboTax will import all the relevant data (this is where
assigning categories really comes in handy, if I assign tax-related
categories properly) and help me prepare my tax return. TurboTax will
also pull in data from previous years' TurboTax files so I don't have
to go digging out old records.

It is my understanding that QuickBooks handles all these things, as
well as lots of other functionalities, for Small Businesses.

http://www.quickbooks.com/services/payroll/
QuickBooks Basic Payroll
"The easy, Do-It-Yourself payroll solution that works with QuickBooks.
Download current tax tables and federal forms directly into your
QuickBooks files. Enables you to offer Direct Deposit to your
employees. (Optional service; additional fees apply.)"
QuickBooks Deluxe Payroll
"The We-Do-It-For-You payroll solution. Comprehensive solution fully
integrated with QuickBooks; simply transmit your payroll data online.
We calculate payroll taxes and deductions automatically and make all
your federal and state tax deposits for you. Stay in Control – print
employee paychecks at your convenience."
QuickBooks Premier Payroll
"The fully outsourced payroll solution. Simply call us or transmit
payroll data from your computer; we'll do the rest. We provide
complete payroll tax depositing and filing services. We print and
deliver your checks."

http://www.quickbooks.com/turbotax/
"Choose the TurboTax product that's right for you! Import your
QuickBooks data into TurboTax! Make your tax preparation easy, fast
and complete. TurboTax takes you step-by-step through your business
taxes, in an easy-to-understand manner. TurboTax is the complete tax
software. It comes with all the forms you need, up-to-date tax laws
and guaranteed, accurate calculations. Easily import your QuickBooks
data into TurboTax. After you complete the EasyStep® Interview,
TurboTax reviews your return and points out errors or items that may
cause an audit."

There are several versions of QuickBooks and TurboTax. An Intuit
representative can ask you questions to help you determine which
version is best suited to your needs. I believe they also offer a free
trial/demo version so you can try the package out before buying. I
recommend you review all the information at www.quickbooks.com and
www.turbotax.com, then call Intuit Purchase Assistance at
800-782-9430.

Now so this isn't completely an unpaid shill for Intuit's Products, I
will list some others that I found by searching the web. I can not
give you any information or recommendations about these. As with all
software purchases, you will want to do your homework (review product
details, ask questions, try demo versions, ask the company for
names/phone number from other people who have purchased their software
and are willing to talk to you about it, search for "rants" and
"raves" websites on the web either praising or complaining about the
product) before purchasing.

This company is probably Intuit's biggest competitor:
http://www.peachtree.com
Peachtree Software  - offers a variety of off-the-shelf packages for
small businesses. Includes downloads of demos and trial versions.

http://www.payservinc.com
PayServ - Provider of payroll and human resource software solutions. 

http://www.paysoft.com
Paysoft, Inc. - Pro-Pay service bureau payroll software for
accountants, CPAs and tax practioners.

http://www.pensoft.com
PenSoft Payroll Software - Payroll software for the small business,
accounting, or payroll service provider. Computes incomes, taxes,
deductions, benefits, and all federal and state payroll reports.

http://www.quarterfiler.com
Quarterfiler Payroll Software - Payroll software for small business

There are a TON of packages listed at the following sites:

http://directory.google.com/Top/Computers/Software/Accounting/Payroll/
http://directory.google.com/Top/Computers/Software/Accounting/Tax/United_States/Corporate_Tax/

The effort required upfront to research and install your software
could be substantial, depending on your number of employees and
complexity of your business. However, once you've got it up and going,
it should make your life MUCH easier.

Hope this is a help to you -- best wishes and good luck!