Being a new employer is an exciting time full of transitions and learning about best practices to create the perfect work environment for your new employees. Here's Empire's 5 point checklist of essential steps to ensure a smooth and safe business launch!
1. If you’re hiring personnel, ensure they’re correctly identified as an Employee (W2) or Contractor (1099):
These simple questions will help you determine how to categorize your new employees:
If you answered “yes” to these questions, it’s very likely that this individual should file a W-2 as a regular employee instead of as a 1099 Contractor.
2. Get an EIN and a tax account identification number:
The IRS requires businesses to obtain an EIN or Employer Identification number in order for you to report tax and tax payments. Complete a free online application, if you haven’t done so already. In addition, New York City requires each business to have a tax account in order to offer specific services. You can apply for an EIN number here, on the IRS website.
3. Stay on top of employee paperwork:
It’s very important that each employee in your company files a Form I-9 as this ensures their eligibility to work in the United States. Remember to keep these forms and all supporting documentation for three years and/or one year after the employee leaves. Also be sure to complete a Form W-4 detailing the employee’s marital status, withholding allowances in addition to the state’s withholding form. Also be sure to report new hires to the state within 20 days of hire.
4. Post required labor law posters:
As soon as you have one W-2 employee, you are required to display the most recent labor law poster at each location an employee completes work. You can obtain these posters here.
5. Last but not least, get Workers’ Compensation Insurance.
Workers’ Compensation Insurance ensures that employees, who suffer from any job related injuries, are covered. If you don’t have worker’s compensation you could be held liable to cover an employee’s medical care and lost wages. Furthermore, you run the risk of being cited and fined, by the state, for not offering coverage.
We hope this list helps you get organized to rev up the engine on your new business! If you have any questions about setting up Payroll or Bookkeeping for your new business, contact us here. To learn more about taking steps towards Incorporation, visit our quick questionnaire here. Post your comments in the space provided below and share this with colleagues, friends and family who are starting up businesses to spread the CEO love!
Empire Tax Professionals