| Few things are as exciting-or as scary-as
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| | returns, such as unemployment taxes,
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| hiring your first employee. Whether
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| | workers' compensation, and so on.
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| you're a small business that is doubling
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| | 4. If you intend to withhold state income
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| its work force (from one employee to two
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| | taxes, obtain your state's equivalent of
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| employees!) or a busy professional hiring
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| | Circular E. It tells how much state
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| your first household employee, it's a big
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| | income tax to withhold from an employee's
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| step to suddenly assume the
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| | payroll check.
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| responsibility of regularly meeting a
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| | 5. Obtain federal and perhaps state tax
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| payroll.
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| | deposit coupons so that you can remit
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| Unfortunately, in addition to all the
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| | federal and state tax deposits to the IRS
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| other issues that you now need to
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| | and the equivalent state revenue agency.
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| address-whether you can afford new
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| | (Ask for these if you don't get them
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| employees, picking the best person for a
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| | automatically.)
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| job, and so on-you also have mounds of
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| | 6. At the end of the first quarter during
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| new paperwork to deal with.
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| | which you employ people, obtain the
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| I can't describe all this new paperwork,
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| | appropriate federal and state quarterly
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| but I can give you an overview of what
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| | payroll tax return forms. For federal
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| you need to collect and prepare for the
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| | payroll taxes, businesses should use the
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| federal and state governments. If you
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| | 941 form. You also probably need to file
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| have questions about all this, I suggest
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| | equivalent state quarterly payroll tax
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| you confer with an accountant or a
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| | returns.
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| bookkeeper who specializes in helping
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| | 7. At the end of the year, obtain the
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| small businesses prepare their payroll
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| | appropriate federal and state annual
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| and payroll tax returns.
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| | payroll tax returns. For federal
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| New Employer Checklist
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| | unemployment tax returns, for example,
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| As a new employer, you need to do the
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| | you need the 940 or the 940EZ form, and
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| following:
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| | again, you probably need the equivalent
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| 1. Request and receive a Federal Tax
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| | state form for annual payroll tax
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| Identification number from the IRS. To do
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| | returns.
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| this, fill out IRS form SS-4 (call the
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| | When You Hire a New Employee
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| IRS to request one or visit the IRS web
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| | Whenever you hire a new employee, the
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| site at to download one) and return it
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| | employee must fill out a W-4 form. This
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| to the IRS. The IRS will send you a
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| | form provides you with the employee's
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| Federal Tax Identification number.
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| | Social Security number, filing status,
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| NOTE You can also receive a Federal Tax
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| | and personal exemptions. You need both
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| Identification number over the telephone.
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| | the filing status and the personal
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| Just tell the IRS agent how you filled
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| | exemptions to determine the amount of
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| out the SS-4 form, and he or she will
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| | federal income taxes to withhold, and you
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| enter it into the IRS computer and give
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| | need the employee's Social Security
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| you the number. You still need to send or
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| | number so you can prepare a year-end W-2
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| fax in the SS-4 form, however.
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| | statement.
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| 2. Obtain a copy of the Employer's Tax
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| | You will very likely have other
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| Guide, commonly referred to as a Circular
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| | requirements, which are not related to
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| E, from the IRS. This pamphlet tells you
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| | income taxes, to meet. For example, you
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| how much federal income tax you need to
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| | may need to verify to the Immigration and
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| withhold from a person's check and what
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| | Naturalization Service (INS) that the
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| Social Security and Medicare taxes you
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| | person you're employing either is a U.S.
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| and the employee pay. (As noted earlier,
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| | citizen or has a valid work permit. Be
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| you can download this document from the
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| | sure to check for this type of
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| IRS web site.)
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| | requirement. The IRS's Employer's Tax
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| 3. If your state requires it, get an
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| | Guide and the equivalent state
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| employer identification number from your
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| | information guide can supply most of the
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| state for filing state payroll tax
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| | information you need.
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