I now have my s-corp up and running. I'm looking at companies that do payroll services, but the more I learn the more I think I should do it myself. I am the only employee and I live in WA so no state income tax. As far as I can see the only forms I need to worry about are:
form 941 each quarter
form 940 end of the year
form w-2 end of the year

Is it really that simple? Why do these companies want to charge me $70 a month for this? What am I missing?

You're not missing anything.

Over the years (and I've had many) I've tried them a couple of times. Never kept them over 90 days. They do make mistakes and they do cost money.

The reason some small businesses "hire out" their payroll is because they have a tendency to forget deadlines, including making deposits on time. They want somone else to shoulder the responsibility.

Actually, there is no reason why you can't do your own. All of the accounting programs have psyroll built in, or you can buy a stand-alone payroll program for under $ 100 that will do all the forms for you.

Or, you can do it using the tables provided by the IRS. Particularly if you pay yourself a salary, it's just the same thing each pay period. Go in the tables one time, set it up and repeat each payday.

Thanks Pete,

Yeah, since I'm going to pay myself the exact same amount every pay period I just need to calculate the withholdings once. Do you know what forms/tables are used to calculate the withholdings?

Thanks!

Download the IRS pub 15 that has all the charts for Federal withholding.

http://www.irs.gov/pub/irs-pdf/p15.pdf

my 2???

...for small businesses. PayMaxx and SurePayroll both offer full services for 1 employee, paid monthly, for less than $35 a month.

I hate dealing with these things so much, I outsourced it. I use Paymaxx, which is less than half of the figure you quoted above.

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Peter T Davis
Frixer, Inc.
Helping people make profitible businesses on the web.