Payroll tax programs can prove to be a valuable investment for many business owners. When you first start your business, computing and reporting taxes may have been an easy task. As your business grows and you hire more employees, this task can become very time consuming.

Finding payroll tax software that is user friendly and comprehensive enables you to spend more time running your business and less time figuring out employee payroll. Consider the following suggestions to help you choose a program that meets your needs:

1. Try the payroll program before you buy it to ensure it is user friendly.

2. Get a program that figures out Federal taxes.

3. Ensure proper state tax withholdings and reporting.

Action Steps
The best contacts and resources to help you get it done

Take advantage of business payroll software free trial offers

Many payroll tax software providers offer free trials and others only offer online demos of the programs. Being able to try a payroll tax software program before you buy is a valuable option that can save you from spending money on a program you won't use.

I recommend: RealTaxTools.com offers a free trial for its payroll software. The price of the software is reasonable if you decide to continue using it after the trial period expires. You can find a free trial for award winning business tax software at Pay Cycle. This software for payroll is available for a monthly fee after the trial.

Find a payroll program that computes federal taxes

Preparing federal tax reports can be a time consuming undertaking if you don't have a program that computes the reports for you. Many of these programs allow you to e-file the information with the government. This can be a time and money saving option.

I recommend: Tax Software offers a varied selection of payroll tax programs, including LiveTax, which is an all inclusive program for determining and filing federal tax information and forms. ZPAY Payroll Systems offers an all-inclusive federal tax payroll system that includes quarterly reporting and ACH transactions.

Use a payroll program that figures state taxes

Because state income tax laws vary, figuring the amounts and filing requirements can be difficult. This is especially true if you have employees from different states. Finding a payroll program that computes employees' state income taxes and helps you file the tax reports can prove to be a wise investment.

I recommend: Payroll Forms Exact has state by state options to help you file payroll taxes as required by each state. You can e-file some information straight from the payroll tax program to states that support the service. Intuit offers a complete payroll software package that includes automatic Federal and state tax preparation.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  If you don't have a lot of money to invest in a payroll software program, consider subscribing to a program that charges a monthly fee to soften the blow to your financial statement. Many of the companies that offer monthly subscriptions allow you to either purchase the program at full price or purchase a yearly subscription at your discretion.