By now you've figured out that the government excels in at least one area: Red tape.
The reporting requirements you experienced as an employee have multiplied ten-fold now that you've entered the world of business ownership.
Staying on top of government forms can seem like a full-time job. The only problem is that time is a precious commodity in most small businesses. To help streamline your company's federal reporting requirements, the government's business portal (business.gov) has compiled a list of the most essential government forms in a small business workplace.
- I-9. An I-9 is an Employment Eligibility Verification form. It confirms that your employees are legally qualified to work in the U.S. Rules governing I-9s come from the U.S. Citizenship & Immigration Services department and with the increased attention immigration issues are receiving lately, you'll want to make sure every employee has been properly documented.
- SS-4. Almost all businesses are required to have an Employer ID number. The government uses this number to identify your company for employment and other purposes. To receive your number, you will need to complete Form SS-4: Application for Employer Identification Number.
- W-2. Form W-2 is a year-end employment reporting requirement. It's the mechanism employers use to report each worker's salary, wages, compensation and withholdings. Filing deadline for W-2 forms is January 31, so you'll need to hustle to distribute W-2s within the required timeframe.
- W-4. Form W-4 is another tax-related government form that identifies the employee's payroll withholding. Unlike the W-2, it doesn't need to be completed every year. Unless the employee changes the amount of his withholding, it only needs to be filled out once – at the time of hiring.
- W-9. A W-9 form gathers information employers need to fulfill federal reporting requirements. It records the name, address and social security number (or EID #) of a person or organization to whom your company has made a reportable payment. This form doesn't need to be filed with the IRS, but it does need to be filed for later use in 1099 reporting.
- 1040 Schedule C. 1040 Schedule C forms are a common feature in small business tax reporting. A Schedule C reports income and expenses from self-employment, and is used to calculate the amount of tax that is owed in a sole proprietorship or pass-through business entity.
- 1099. 1099 forms are the equivalent of a W-2 for independent contractors or consultants. They include any nonemployee compensation and are required for payees who have received more than $600 from your business during the current tax year.