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Setting Up a Payroll

Okay, I won't fuss, although I sure want to!!!  Ha.  You are doing the correct thing to make yourself a employee of the corp.  At least you are not an LLC, in which case I would have hit you over the head!  So, you have left the door open for us to convert you to an S corp when the timing is better for you personally (an S corp flows through to your personal return like a partnership does, but it does have significant tax savings).  That is a good thing for us to keep in the back of our mind.
So, okay, you are now an employee.  You will be happy to know that my fees are only 100 a year for you.  That's right--100 for the YEAR.  Now, here is what that includes:
Semi-monthly (every two weeks) you will let me know how many hours or what your pay is (gross).  I will figure the net, and send the info back to you.  This process can be done via fax or email.  I do NOT prepare your check(s).  I send you a report telling you what the amount for the check is, plus the report tells you the withholdings, the monthly totals, quarterly totals, yearly totals so far, etc...I normally respond very fast.  Usually within a few hours or even minutes of your fax, depending on when I receive it, of course.  You have a great chance of catching me at 2 am, more so than 8-10 am!  I am still a terrible night owl.  If I go on vacation or holiday plans, I let you know and get your stuff done either early or will do it even when I'm away.  I do usually ask for 24 hours advance notice, if possible.  I do many payrolls, and this process has been working out well.
All quarterly reports required--941, Unemployment.  Also the W-2 at end of year.
A report telling you what the total amount of the taxes are adding up to (if requested).
This 100 charge is per employee, so if you have 3 employees, my charge is 100 per employee per year.  This amount is usually paid to me quarterly after I finish the reports, I will bill you, so it would be 25 dollars per employee per quarter, of course.  Oh, by the way, I'm not a CPA (I am legally supposed to tell you that, as you mentioned it)  If I was, I imagine your fees would be higher!  However, to pat myself on the back, I AM now a RTRP (Registered Tax Return Preparer).  I passed that crazy test last June. 
Now for your homework:  (You didn't think you'd get by without doing some, did you?)
It would be best if we can start the payroll after the new year.  It really doesn't make sense for us to do a lot now since it is already December)
However, you can do the following now to save us time (esp since my busy season will be upon me):
Prepare a W-4 for yourself.  Do yourself a favor, skip the entire top section.  Go down to the bottom of it , fill out name, SS, address, etc. and mark the boxes as you wish (or you can consult me).  If you fill out that stupid top section, it will have you claiming everybody and the kitchen sink.  Fax that W-4 to me  758-8494 anytime.  Simply go online and google W-4.  Print it out and fill it out.
Google TN Dept of Labor--go to employer services.  You will find a form to register the business for unemployment.  It is called an Application To Determine Status (make sure you get the right one).  It is about 4 pages-but is easy to fill out, some of it won't apply.  It doesn't cost anything, but we must have it completed so they will send us unemployment forms or enable us to file the unemployment on-line.  Yes, you do have to pay unemployment on all employees including yourself.  The good thing is, say the business doesn't go well, you can draw unemployment!  Fill it out. Yell at me if you need help.  Once they get it, they will mail you back a letter saying you are an "employer and subject to the tax for your employees".  Well, gee, we knew that!  Main thing is--now you have an account.  Your unemployment is due quarterly (April 30, July 31, October 31, January 31).
If you plan on paying yourself a large salary (say 3000 a time, or something) or adding all the employees at one time in January, google EFTPS.  Just those initials.  It is the IRS's way of getting the taxes paid by you every month.  Fill out the info requested (again, simple and free).  They basically want to be able to draft the taxes out of your bank account.  They will send you a PIN number in a couple of weeks by mail, and you will either call them or do it on-line when the time comes-by the 14th of the month after the month you have paid the employees (for example Jan is due by Feb 14).  This is an easy quick process, and they have help lines 24/7 if you need help.   You can also do this 24/7/365 and the phone (recording) is always answered quickly.  Yell at me before you do it the first time for a couple helpful tips. 
If the salary is not a large one, and/or it is just you, we can wait and pay in the taxes on the quarterly 941 report.  If the taxes do amount to over $2,500, then we must do the EFTPS routine.  No way around it.  At least its free, quick, and easy.  Even if we are doing it just on the 941 and it accidently goes over $2,500-then we can get by the 1st quarter it happens.  But, not after that, or there are penalties for you.  One thing you MUST know--payroll taxes are taken VERY seriously by the IRS.  Not paying in the taxes amounts to fraud and embezzlement as part of the monies do not belong to you-it belongs to the employees.  The EFTPS method is a great method to make sure the payroll taxes are paid in properly and timely even if you aren't subject to the $2,500 rule.
Now, how about how much we are talking about in taxes here:
FICA--right now, employee pays 4.2 percent, employer pays 6.2 percent.  I look for this to change back to being 6.2 percent for both employee and employer the way it used to be a couple years ago.   Will depend on Congress. Therefore, assuming that, then 6.2 percent of the gross is subtracted from the employee's salary and matched by the employer.  Once your salary hits 112-113K or so, (threshold changes yearly, Congress announces it)  then you are not subject to this tax (neither employer or employee).
Medicare--1.45 percent by both employee and employer (no threshold on this tax).  Assuming your own payroll (combined with your spouse)  will not go over 250K, I won't discuss the new Obamacare medicare tax starting in 2013-an additional .9 percent for now.
Federal Withholding (we are not subject to state thanks to being in TN).  Whatever the W-4 tells me to withhold, according to the tables in my payroll software program.
Unemployment (paid every quarter)--it will be 2.9 percent and comes out of the employer's pocket only.  Note.  After you or the employee goes over 9000, you don't owe any more for that employee for the rest of the year.
Small 940 tax at year end (56 dollars or so per person per year)  I will figure this.  The 940 is Federal Unemployment and stops when a person reaches 7000 in wages.  If you have a large number of employees, this has to be paid in quarterly through the EFTPS system. 
By the way, the EFTPS system is also required for paying in corporate taxes on your corporate return (if a gain) and/or corporate estimated taxes.
My bill for the payroll/ taxes isn't bad, but I will have a corporate federal and state return to complete, in addition to your personal.  I'm normally around 500 or so for corporate returns (federal and state combined) depending on how much time and work is involved.  I can be less (say 350-400), if your bookkeeping is easy to follow and I'm not scouring around hunting receipts, etc.  If your records are messy, incomplete, hard to follow, etc., I will charge you GOOD!  Do yourself and your pocketbook a favor.  If you do not want to do the bookkeeping yourself, hire it done by a friend of mine--Bill Cupp.  He owns Cordova Business Services, and had actually worked for me a couple years ago.  He knows how I want things done and prepares them for easy tax preparation.  His number is 371-1549.  He knows Quickbooks really well, and since he is self-employed, will not be an employee on your payroll (saves you big time on those taxes!!).   Sometimes I get stuff prepared by other bookkeepers, and its a mess.  You don't want to have to pay them, and then pay me too for the same work.  If you choose to do it yourself, or your wife or somebody, PLEASE get with me so I can show someone how I need it done.  It will save both of us time and money. 
I trust this "book" has answered your questions, and probably a lot you didn't ask.  If you have any more questions, please don't hesitate to ask.  I'm here for you as always.  However, one last thing comes to my mind--you are now a corporation.  Remember that--you don't own your corporation--it owns you.  (kinda like your pets).  It is a separate entity all by itself.  If you take money from it, it is income to YOU.  DO NOT expect it to pay your household bills.  Do NOT use it like a piggybank.  That 10 dollars for that shirt, haircut, personal lunch, etc???  It will be INCOME to you.  If your salary from this is what you depend on to pay personal bills, then make sure that salary is large enough to cover them.  IF you "borrow" or otherwise get money from your corporation without paying it back, you lose your corporate protection in any type of lawsuit.  Its called "piercing the corporate veil", and the opposing attorney knows all about it.  Then, anyone suing you can go right through it to your personal stuff, and you have wasted everything you have done by getting incorporated. 
Holler if you need help with anything, and thanks for writing!