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Originally Posted by turbo6bar
Tidy, thanks for the clarification. My hands were typing faster than my head. I know I'll have to eat half of the SS/Medicare deductions. I accept my obligations to the Federal government, but am still unsure about the best way to proceed further in a manner that's legal and beneficial for employer and employee.
Jurgen
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Just to be sure you understand my comment, you don't eat 1/2 the deductions - you match (i.e., you deduct 6.2% from the employee for social security but you pay the IRS 12.4% you do the same for medicare). For taxes, you just deduct from the employee and submit to the IRS. Depending on the size of the payroll, you will have to submit pmts monthly or quarterly. At the end of each quarter, you have to file a payroll tax return - usually within 30days of the end of the quarter.
Regarding workers comp insurance, I would think you just buy an insurance policy for workers comp. As far as handling claims, I blieve there are services for this for small business's - you just send the employee to a special doctor and they handle the paperwork with the insurance company.
It does get complicated but it's not that difficult. Lot's of CPA firms do accounting for small businesses (ie. pay the bills, invoice dustomers, and payroll).