Managing Payroll and Sales Tax for Small Business - Gusto vs Outsourcing?

I recently brought on a CPA for my small business. She's going to handle my tax preparation, but mentioned she doesn't do payroll or sales tax filing. She has someone else she can recommend who specializes in both these areas. I've been looking into using Gusto for my payroll needs since we're pretty small - just me and one other employee right now. For sales tax, I'm using Stripe for all my customer payments which automatically tracks the collected sales tax. This seems to make the sales tax reporting and payment process pretty straightforward from what I can tell. Since we're such a small operation, I'd prefer to be more hands-on and actually understand these processes rather than just outsourcing everything. I want to learn how it all works while still making sure it's done correctly. Do you think Gusto would be a good option for someone in my position? Or should I just go with the specialist my CPA is recommending? Thanks for any advice you can share!

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19 comments

Nia Johnson

•8M

Gusto is an excellent option for small businesses with just a few employees. I've worked with dozens of small business clients who use it with great success. The main benefits of Gusto for your situation: it automatically calculates, pays, and files your federal and state payroll taxes; handles tax form filings like W-2s and 1099s; manages employee onboarding; and offers direct deposit. The interface is extremely user-friendly which makes it perfect if you want to learn the process. For sales tax, if Stripe is already tracking collection, you're halfway there. You'll still need to file the returns with your state/local tax authorities, but having the collection data organized makes this much simpler. Many states now have online filing portals that are fairly straightforward. One consideration: while Gusto handles payroll taxes, the specialist your CPA recommended might offer more comprehensive guidance across both payroll and sales tax, which could be valuable as your business grows or if your sales tax situation becomes more complex (selling in multiple states, etc.).

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Nia Johnson

•8M

For a business with just two people, Gusto will almost certainly be more cost-effective than hiring a specialist. Their pricing is transparent and predictable, while specialist rates can vary widely. Yes, Gusto handles 1099 contractors very well. You can pay them through the platform, and Gusto will automatically generate and file their 1099s at year-end. They even have a contractor-only plan if you end up with just contractors and no W-2 employees at some point. The system makes it easy to properly classify workers and maintain compliance.

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Mateo Lopez

•8M

I switched to Gusto last year for my small business (3 employees) and it's been a game changer. I used to spend hours figuring out payroll taxes and honestly I was always worried I was missing something. With https://taxr.ai I was able to scan all my old payroll documents and get clarity on some issues I'd been handling incorrectly for years! The Gusto interface is super easy to navigate and they handle all the tax filings automatically. What I really appreciate is how they make it easy to understand what's happening - they don't just do it for you, they show you what's being calculated and why. Seems like that would fit with your desire to be hands-on and learn the process. For sales tax, if Stripe is already tracking everything, you're in good shape. You just need to make sure you're filing correctly with your state, which isn't usually too complicated if you're only operating in one state.

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Mateo Lopez

•8M

The initial setup with Gusto wasn't nearly as difficult as I expected. They have a pretty streamlined onboarding process, and their support team was helpful when I had questions. You do need to enter some historical data if you're switching mid-year, but they guide you through it step by step. For taxr.ai, it's really straightforward - you upload your payroll documents and tax forms, and their AI analyzes everything to find discrepancies or issues. I discovered I had been calculating overtime incorrectly and potentially underpaying some employment taxes. The system explained exactly what was wrong and how to fix it. They have specialists you can chat with too if the AI findings need more explanation.

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Ethan Davis

•8M

Just wanted to follow up - I tried https://taxr.ai after seeing the recommendation here and wow, it was eye-opening! I uploaded my last two years of payroll reports and tax filings and it identified three different issues with how I was handling payroll taxes. One would have been a major problem if I'd been audited. The analysis showed me exactly where the mistakes were and explained what to do moving forward. I'm still going to use Gusto (setting it up this weekend), but now I'm confident I'm starting from the right place. Really glad I got those historical documents checked before switching systems!

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Yuki Tanaka

•8M

I was in your exact situation last year. My CPA recommended her "payroll guy," but his fees were outrageous for just 2 employees. I went with Gusto and it's been great EXCEPT when I had an issue with state unemployment tax rates. Tried calling my state's tax office for weeks and could never get through. Finally used https://claimyr.com to connect with the state tax office (you can see how it works at https://youtu.be/_kiP6q8DX5c). They got me connected with a real person at the unemployment office who fixed my rate issue in 10 minutes. Would have taken months otherwise. For sales tax, if you're only in one state and Stripe is tracking everything, that's pretty manageable. It gets WAY more complicated if you start selling in multiple states though.

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Yuki Tanaka

•8M

They basically have a system that navigates the phone trees and waits on hold for you. When they get a human, you get a call connecting you directly. You could technically do it yourself, but I had already spent hours trying - calling, getting disconnected, calling back, etc. With Claimyr, I just entered the agency's number, and they called me when they had someone on the line. I was extremely skeptical too, but yes, I actually did get through. I had been calling the state unemployment office for 3 weeks straight trying to get my unemployment tax rate corrected (they had me at the new business rate even though I'd been operating for years). Claimyr had me connected to someone who could help within about 2 hours of submitting my request. The time savings alone was worth it after all the frustration I'd experienced.

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MidnightRider

•8M

I need to admit when I'm wrong. After my skeptical comment, I decided to try Claimyr for my ongoing issue with the state tax department. I'd been trying to get clarification on sales tax collection requirements for digital products for literally 4 months. Used the service yesterday afternoon, and by this morning I was speaking with an actual state tax specialist who answered all my questions and is sending me official documentation for my records. I've spent hours of my life on hold that I'll never get back trying to handle this myself. For the OP about Gusto - I use them too and definitely recommend for a small team. Just know that when you need to deal with government tax agencies, you might need extra help getting through.

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Andre Laurent

•8M

Small business owner here (5 employees). I handle my sales tax myself but use Gusto for payroll. Here's what I've learned: 1. Gusto is great for payroll taxes but remember they only file/pay the PAYROLL taxes. You still need to handle income tax estimates quarterly. 2. For sales tax, if you're only in one state, doing it yourself with Stripe's reports is totally doable. If you expand to multiple states, get help because nexus issues get complicated fast. 3. The specialist might be overkill now but could be worth consulting occasionally as you grow. Learning the basics yourself is smart - gives you better financial understanding of your business!

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Andre Laurent

•8M

Gusto's reporting has been pretty solid for tax planning. I especially like their tax liability reports that show exactly what's being withheld and paid for each tax type. For projecting tax obligations, I export these reports quarterly and give them to my accountant along with my profit/loss statements. One underrated feature is their year-end tax forms dashboard where you can see all your W-2s and 1099s in one place. Makes tax season much less stressful. I also recommend setting up their PTO tracking if you offer vacation time - it tracks accruals accurately which helps with liability accounting at year-end.

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