It is tax time again… Are you ready to take care of your taxes for your small business? Make sure you have all the right forms to send in or you could be the victim of an IRS audit or worse, and IRS debt! Here are some of the forms you should have to keep track of your taxes and make sure you file your return correctly. Tons of paperwork… Let’s go down the list of forms you should have to file your taxes, specifically the forms that have to do with your employees.
- W-4 Employee’s Withholding Allowance Certificate: This one is obvious. Any new hire you have has to fill this out. They have to let you know what their filing status is and how many exemptions they can claim. This form is critical because it determines how much in taxes you take out of their check.
- W-5 Earned Income Credit Advance Payment Certificate: If you have employees who are eligible for the Earned Income Credit can get part of their credit payment in advance when they fill out this form.
- W-2 Wage and Tax Statement: Again, this is the form everyone knows. It’s the form an employee receives at the end of the year showing their earnings as well as how much was taken out of their salary for taxes. As an employer you are responsible for making sure the W-2 is correct and the proper amount of taxes were taken out.
- 940 Employer’s Annual Federal Unemployment Tax Return: This is the form you need to fill out to show how much you paid out in unemployment.
Just in case… Make sure you have copies of all these forms for both your employees and yourself. The IRS takes a special interest in small businesses and just waits for you to make a mistake so they hit you with a debt and come after you. Don’t let the IRS hurt your business because of a single form. You may already have a copy, but just in case here’s the link to the IRS Employer’s Tax Guide.
- 941 Employer’s Quarterly Federal Tax Return: I don’t need to tell you how important this is! You have to file a 941 payroll tax every quarter, no exceptions. This form shows how much you paid your employees for the quarter and how much was withheld for taxes. You have to pay the IRS the withheld amount.
- 1099-MISC Miscellaneous: This is your income minus any applicable deductions. You also report any contractors you hired on this form as they’re not regular employees.