Paying yourself and paying the government taxes

Payroll and federal income tax withholding:
So that you don’t have to write checks to yourself, you will want to use a payroll service. The cheapest that I have found (without compromising customer service) is www.paycycle.com If you decide you want to use them, let me know, they have a refer a friend service which sometimes gets you some special deal. We use Paycycle basic, which for $25/month does direct deposit for up to 5 employees and automatically files your federal taxes and prepares your W2s (it also has a new employee check list to ensure that your have all the required forms on file for each employee). You can also add reimbursements of expenses to your paycheck (which are not taxed), that again allows you to get your own reimbursements without signing a check to yourself.

If you really want to pay yourself (figure out your own taxes, etc.) you can do that. Just be sure to figure out what taxes need to be withheld from your paycheck BEFORE you write the check!

CAUTION: YOU NEED TO AVOID EVEN THE SEMBELANCE OF IMPROPRIETY, SO MAKE SURE THAT IF YOU ARE PAYING AND/OR REIMBURSING YOURSELF (a fact of life for a small non-profit) EITHER VIA CHECK THAT YOU WRITE OR DIRECT DEPOSIT, YOU NEED TO MAKE SURE THAT YOU HAVE YOUR BOARD TREASURER SIGN OFF ON THESE EXPENSES AT LEAST ONCE A QUARTER.

City/State taxes:
We do these ourselves. Paycycle actually calculates the income tax withholdings for you so all we have to do is log on once a month to the DC taxpayer service center (details at https://www.taxpayerservicecenter.com/GetStarted.jsp) and pay them.

If you don't want to sign up online, you can go get a physical booklet and mail a monthly form.


Unemployment taxes:
The DC government’s Department Of Employment Services (DOES is online at http://www.does.dc.gov/) will send you quarterly forms. Again Paycycle has already figured out how much you will owe, you just fill out the form and send it in. Very simple, but make sure you are getting these each calendar quarter (call them if you aren’t… you don’t want to be in noncompliance). They only do these forms by mail right now (no online payment).