Thinking of hiring an employee?

For the convenience of Finger Lakes small business owners who might be considering employing somebody, here's an informal, and not necessarily complete, list of the forms you'll need to prepare and submit to various authorities:

• Form SS-4 Application for Employer Identification Number (EIN) (www.irs.gov/pub/irs-pdf/fss4.pdf) – Your business must obtain an EIN if you have employees or will file for other taxes such as excise taxes.
• Form NYS-100 New York State Employer Registration for Unemployment Insurance, Withholding, and Wage Reporting (www.tax.state.ny.us/pdf/2002/wt/nys100_1002.pdf) – To be filed when you become an employer.  You will be assigned an Employer Registration Number, which is separate from your federal EIN.
• W-2 (www.irs.gov/pub/irs-pdf/fw2.pdf) – Form stating wages and withholdings made for an employee throughout the year.  A copy is sent to the employee, the Social Security Administration, the IRS, the NYS Department of Taxation, and to county/local governments that have an income tax such as New York City.
• W-3 (www.irs.gov/pub/irs-pdf/fw3.pdf) – Similar to the W-2, filed with the Social Security Administration
• W-4 (www.irs.gov/pub/irs-pdf/fw4.pdf) – Form filled out when an employee starts so that their employer knows to withhold the correct amount of taxes.
• W-5 (www.irs.gov/pub/irs-pdf/fw5.pdf) – Employees eligible for the Earned Income Credit may file this form to get an advance on their credit.
• Form NYS-45 Quarterly Combined Withholding, Wage Reporting, and Unemployment Insurance Return (www.tax.state.ny.us/nyshome/efile_addnys45.htm) – State form to be filed quarterly.
• Form 940 Employer’s Annual Federal Unemployment (FUTA) Tax Return (www.irs.gov/pub/irs-pdf/f940.pdf) - Required if you had cash wages greater than $20,000 or employed 10 or more workers throughout the day for 20 or more weeks in the year.
• Form 941 Employers Quarterly Federal Tax Return (www.irs.gov/pub/irs-pdf/f941.pdf) – Required to report wages paid, tips received, federal taxes withheld, Social Security and Medicare withholding, and advance EIC payments for non-farm workers.
• Form 943 Employers Annual Federal Tax Return for Agricultural Employees (www.irs.gov/pub/irs-pdf/f943.pdf) – Form 941 for farms.
• Form 1099 (instructions www.irs.gov/pub/irs-pdf/i1099msc.pdf) – Must be furnished to people who received $600 or more in non-employee compensation throughout the year.
• Form 945 Annual Return of Withheld Federal Income Tax (www.irs.gov/pub/irs-pdf/f945.pdf) – Used to report income tax withheld for non-payroll wages.
• Form 4029 Application for Exemption From Social Security and Medicare Taxes and Waiver of Benefit (www.irs.gov/pub/irs-pdf/f4029.pdf) – Certain members of religious organizations (generally Amish or Mennonite in agriculture) may file this form to exempt themselves (and their employer) from Social Security and Medicare taxes.

 Make a mistake and you could end up in jail.  

Government regulation favors big business over small business. That intimidating tsunami of paperwork might be easier to handle if your HR operation is outsourced to a contractor in India.   Next time your local politician is telling you how she supports small business, ask her to run through this list with you.