Hiring a first employee is a milestone for any commercial establishment, of course, but also leads to a certain amount of paperwork related to taxes. You need to make sure your business is compliant not just with the IRS, but with federal and state agencies. This is where a qualified financial planner in Santa Rosa can help.
Start With A Number
When you hire someone, your Social Security number needs to be replaced with an Employer Identification Number (EIN) as your tax ID. This can then be used for the opening of a business bank account or applying for a business license, among other things. It is also necessary before you start paying your first employee, as any qualified financial planner in Santa Rosa will inform you. The number will also have to be given to your new hire and will help you determine how much federal income tax to withhold every payday. This does not apply to independent contractors, as they require a different form.
It helps to familiarize yourself with payroll processing, a lot of which can be done using an online application. A financial planner can explain how this works and also help you understand state taxes or any local obligations you may have, in addition to other taxation requirements.
Find Out About Forms
Hiring or re-hiring someone requires you to contact your state, as all employees must fill out a Form I-9 on the first day of a new job while proving that they are legally eligible to work in the United States. The form comes from the Department of Homeland Security, and employers are charged with verifying the accuracy of all information provided on the basis of approved documents that can range from a passport to a birth certificate. A financial planner in Santa Rosa can help you with documentation as well as online tools that can make the task simpler.
Spending time at the Department of Labor website can give you answers to many questions you may have about rules for new employers. It still makes sense to talk to a financial planner in Santa Rosa though, to understand what federal employment laws apply, what sort of record keeping you will need to do, and how to prepare for tax obligations to avoid unnecessary paperwork at a later date.
Contact Montgomery Taylor For Advice
We have a team of qualified tax accountants in Santa Rosa ready to help with first employees as well as any other tax-related paperwork. For advice or answers to questions about taxes, contact the Montgomery Taylor team for a consultation today.