Preparing your own payroll can be easily handled, if you know and understand the requirements of the IRS and your state. To learn what is required by the IRS, I would recommend you read Publication 15 on the IRS website (http://www.irs.gov/pub/irs-pdf/p...). Publication 15 tells you about the taxes you need to withhold from an employee's paycheck. It also discusses the payroll taxes that need to be paid and when those due dates are. Additionally, it discusses Form 941, which must be filed each quarter.To learn the requirements for your state, search the internet for your state Department of Revenue. They will have a similar publication which will show how much to withhold for state income taxes (assuming you live in a state that has state income taxes). You will have to report the wages you pay to your employee to the State each quarter.Additionally, you should be aware there are also federal and state unemployment taxes that the employer is required to pay. Again, you will need to check with your state to determine the state filing requirements. The federal payment requirements are covered in Publication 15.I have seen many small employers receive large penalties from various government agencies for not paying and/or filing payroll taxes and payroll tax returns in a timely manner. The penalties can have a huge, negative impact on your business. If you find yourself not understanding the payroll tax returns that need to be filed each quarter or find that you do not have to time to get them prepared on time, hire a professional! The cost to hire someone to help you can be far less than the penalties imposed.