Sandra Taylor-Sawyer: Everybody’s Business
When a business begins to prosper, the need to hire and train staff is an important step toward growth.
Employers are required to complete several steps before paying employees. This includes registering with federal and state agencies.
The starting point is to obtain a federal number using Internal Revenue Service Form SS-4 Application for Federal Identification Number. The form is available at the IRS Web site, www.irs.gov.
Another Internal Revenue Service document required is Form W-4 Employee’s Withholding Allowance Certificate, which also is available at the IRS Web site. The W-4 is used to gather information about the employee, such as Social Security number, mailing address, marital status and the number of withholdings. The employee must sign and date the W-4. The employee may submit an updated W-4 any time throughout the year as changes in life occur (marital status, death, births, pay increase, etc.).
Employers must have each employee sign a Form I-9 for employment eligibility verification. The Form I-9 can be obtained from the U.S. Citizenship and Immigration Services, www.uscis.gov. This form is used to verify the citizenship or employment eligibility of individuals to work in the United States. All employees are required to complete the I-9. A copy of the employee’s driver’s license, green card and Social Security card should be retained by the employer as a backup to the I-9.
New Mexico requires all employers to register new and rehired employees with the New Mexico New Hires Directory. Employers can register online at the New Mexico New Hires Directory Web site, www.nm-newhires.com. Forms can be downloaded and mailed to New Mexico New Hires Directory, P.O. Box 29480, Santa Fe, NM 87592-9480. Or a copy of the IRS Form W-4 can be sent. The W-4 must contain the employer’s name, address and Federal Employer Identification Number. The W-4 must be readable.
Record keeping is imperative. It is wise to maintain the W-4 and I-9 documents in a folder labeled with the employee’s name. Or, maintain separate W-4 and I-9 folders containing the signed documents of all employees. The maintenance of the forms will allow for easy verification in case of an audit by state or federal authorities.
Growing a business can be exciting, yet challenging. The transition time can be delightful and almost stress free if planned well.
Setting it straight: June’s column on choosing the best business structure contained incorrect information. The total number of owners (stockholders) for a Subchapter S Corporation cannot exceed 100.
Sandra Taylor-Sawyer is director of the Small Business Development Center at Clovis Community College. Call the center at 769-4136 or visit www.nmsbdc.org/clovis.