Do-It-Yourself Payroll
On the Do-It-Yourself plan, DynaTax AI does the math and the paperwork. You hand out the paychecks, pay the taxes, and file the forms. This guide lists every one of those steps and when it is due.
Who Does What
What DynaTax AI does for you: calculates gross pay, federal income tax withholding, Social Security and Medicare for both halves, and federal and Texas unemployment; produces the paycheck and the pay stub; fills in Form 941, Form 940, the W-2s, the W-3 and the 1099-NECs; builds the Texas wage list; posts all of it to your books; and reminds you before each deadline.
What you do: print and hand out the checks, make the federal tax deposit, mail the federal returns, upload the W-2s and the Texas wage report to those agencies, and pay the Texas unemployment tax.
Every Payday
Create and calculate the run
Open Payroll, start a run for the pay period, and enter hours for anyone paid hourly. Salaried people are filled in for you. DynaTax AI calculates the withholding from each person's W-4.
Review and approve
Check the totals, then approve. Approving locks the numbers, generates the pay stubs, and posts the payroll to your general ledger.
Print the checks
Print on check stock, or write the checks by hand using the amounts shown. Check numbers are recorded so your bank reconciliation matches later. See Print Checks for the paper to buy and how to line up the printer.
Hand out the checks and stubs
Give each person their check and pay stub. Employees with portal access can also see their stubs online at any time.
Make the federal tax deposit
This is the step people forget. The tax you withheld is not yours to hold — see the next section for when it is due.
Your Federal Tax Deposit
After each payroll you owe the IRS the federal income tax you withheld, plus both the employee and employer halves of Social Security and Medicare. You pay it through the Electronic Federal Tax Payment System, which the IRS runs for free at EFTPS.gov. DynaTax AI shows you the exact amount and gives you a place to store the confirmation.
Which schedule you are on
The IRS decides this from your lookback period, the four quarters ending June 30 of the previous year. Reported $50,000 or less in payroll tax over those quarters and you are a monthly depositor. More than $50,000 and you are semiweekly. A brand new employer starts out monthly.
- Monthly. Everything you withheld in a calendar month is due by the 15th of the next month.
- Semiweekly. Pay on a Wednesday, Thursday or Friday and the deposit is due the following Wednesday. Pay on a Saturday, Sunday, Monday or Tuesday and it is due the following Friday.
Paying it
Schedule the payment on EFTPS at least one business day before the due date, by 8pm Eastern. A payment started on the due date itself is late. When it goes through, come back to Tax Payments in DynaTax AI and upload the EFTPS confirmation so the deposit is recorded against the liability and your books tie out.
Every Quarter
Two returns, both due at the end of the month after the quarter closes: April 30, July 31, October 31 and January 31.
Form 941 to the IRS
This reports the wages you paid and the tax you deposited for the quarter. Open Tax Forms, generate the quarter, download the PDF, sign and date it, and mail it to the address for Texas employers printed in the IRS Form 941 instructions. That address depends on whether you include a payment, so read the version for the year you are filing. Keep a copy and your mailing receipt. If every deposit for the quarter was made in full and on time, you get until the 10th of the following month to file.
Texas wage report and unemployment tax
Texas has no state income tax, so there is no state withholding to report. You do owe state unemployment tax to the Texas Workforce Commission on the first $9,000 of each employee's wages for the year, at the rate the TWC assigns you.
In DynaTax AI, open Tax Forms and download the QuickFile wage list. Sign in to your TWC account, upload that file in QuickFile, and pay the tax due there. Put your own TWC experience rate into Payroll Settings so the amount we calculate matches the amount TWC bills you.
Once a Year
January is the busy month. Four things land on January 31.
- Form 940. Your annual federal unemployment return. Download, sign, mail. If you deposited all your FUTA tax on time you have until February 10.
- W-2 copies to employees. Generate them in DynaTax AI, then hand them out or email them.
- W-2 Copy A and Form W-3 to the SSA. Same day as the employee copies, not later. Download the EFW2 file and upload it to your Business Services Online account at ssa.gov/bso. Filing 10 or more W-2s means you must file electronically, so BSO is the route for nearly everyone. Register for BSO before January.
- Form 1099-NEC. One for each contractor you paid $600 or more. Send the contractor their copy and file with the IRS.
All the Deadlines
| What | When | How you do it |
|---|---|---|
| Federal tax deposit (income tax withheld plus Social Security and Medicare) | Monthly or semiweekly, set by your deposit schedule | Pay on EFTPS, then upload the confirmation here |
| Form 941, employer's quarterly federal tax return | April 30, July 31, October 31, January 31 | Download the PDF here, sign it, mail it to the IRS |
| Texas wage report and unemployment tax | April 30, July 31, October 31, January 31 | Download the wage list here, upload it in TWC QuickFile, pay in your TWC account |
| Form 940, annual federal unemployment (FUTA) return | January 31 | Download the PDF here, sign it, mail it to the IRS |
| W-2 copies to your employees | January 31 | Generate here, then hand out or email them |
| W-2 Copy A with Form W-3 to the Social Security Administration | January 31 | Download the EFW2 file here, upload it to your SSA Business Services Online account |
| Form 1099-NEC for contractors | January 31 | Generate here, send to the contractor, file with the IRS |
The Tax Calendar in Payroll shows these against your own pay dates, and we email you before each one.
Before Your First Payroll
Get your federal EIN
You cannot deposit tax or file a return without one. Apply on irs.gov and you get it the same day.
Register with the Texas Workforce Commission
You need a TWC account number and the unemployment tax rate they assign you. Enter that rate in Payroll Settings.
Enroll in EFTPS
Do this early. The PIN comes by mail and you cannot make a deposit until it arrives.
Register for SSA Business Services Online
You only need it in January, but registration involves identity verification, so it is not something to start on January 30.
Collect a W-4 and an I-9 from every employee
The W-4 drives withholding. Texas issues no state withholding certificate, so there is no state equivalent to collect.
Buy check stock
Everyone is paid by printed check on this plan. Order the paper before your first payday.
Frequently Asked Questions
Can I pay my team by direct deposit instead?
Not on this plan, and not anywhere in DynaTax AI at the moment. Direct deposit is turned off while we finish building it. Everyone is paid by printed check.
Does DynaTax AI e-file my 941 or my W-2s?
No. We prepare the forms and hand you the file. You mail the returns and upload the W-2s to your own SSA account. Nothing is transmitted on your behalf.
What happens if I miss a deposit?
The IRS charges a failure-to-deposit penalty that grows with how late you are, plus interest. Withheld tax is money you are holding for your employees, so this is the deadline to protect above the others. Deposit as soon as you notice rather than waiting for the next scheduled date.
I am outside Texas. Can I use this?
Not yet. Payroll runs for Texas businesses first, because Texas has no state income tax to withhold and we have verified its unemployment filing. Other states open as their filings are built.
Can someone else do all of this for me?
A tax professional on DynaTax AI can run payroll for you from their own dashboard. Talk to your accountant, or ask us to introduce you to one.