When Is NetSuite Right For Me?

Written By Jennifer Amos

As your business grows, your accounting software needs are likely to change. What used to work brilliantly on its own may now require using multiple apps that you have to figure out how to use and then integrate with your current accounting system. It can be difficult to decide whether or not you need to make a shift to a new accounting system.

Many larger businesses that do take the leap to a new accounting software decide to switch to NetSuite. NetSuite is an ERP that allows you to work in multiple modules in the cloud. It’s generally recommended for mid-size businesses to large businesses with a minimum of 50 employees. If your company file is starting to get too large to run properly and you find yourself getting frustrated with the number of outside apps you need to connect with your current system, NetSuite might provide the solution you are looking for.

 

Advantages of NetSuite

 

  • NetSuite handles all of the hardware, software, upgrades, and security. You can easily access it from any browser using your login regardless of electronic device.
  • NetSuite allows you to customize your software package to meet your needs by choosing the specific products you would like to add such as CRM, HR, compliance, project management, warehouse management, and much more. While you can integrate some outside apps with NetSuite, you may find that they already have a ready-to-go addition to meet your needs.
  • NetSuite grows with you. In addition to customizations, you can also expand your company across countries, languages, currencies, and subsidiaries without having to set up their own company files from scratch.
  • NetSuite encourages collaboration regardless of location and language. It allows you to assign tasks, use approval processes, and automate accounting steps.

 

Disadvantages of NetSuite

 

  • NetSuite does cost significantly more than other alternatives such as QuickBooks Enterprise and Microsoft Dynamics. The cost for implementation on its own can run into the tens of thousands of dollars. After that, they have a subscription model.
  • NetSuite does not have an easy to access way to have questions answered through Google search engines or YouTube videos like QuickBooks does. Usually you will need to contact either NetSuite’s customer service or a firm like Squire to address issues.
  • NetSuite Pricing can get confusing depending on the number of add-ons, which is why they request you speak with them about a quote instead of listing the prices directly on their website.

 

If you are interested in learning more about NetSuite, please contact us. We have a NetSuite team ready to answer your questions and assist with implementation if you feel it is the right solution for you.

John O’Leary – Squire Client Appreciation Event

 

CLICK HERE TO REGISTER

 

Live Inspired

Squire Client Appreciation Event

Date: 

October 4th, 2018

Time: 

Two Sessions, 4 PM and 7 PM

Location: 

Larry H. Miller Megaplex Theaters at Thanksgiving Point

2935 North Thanksgiving Way, Lehi, Utah

Cost: 

Free to Squire Clients

Details:

Please join Squire for an evening of John O’Leary, a #1 National Bestselling Author & Speaker. 

Expected to die. Now teaching others how to truly live.

In 1987, John O’Leary was a curious nine-year-old boy. Playing with fire and gasoline, John created a massive explosion in his home and was burned on 100% of his body. He was given 1% chance to live.

This epic story of survival was first showcased in his parents’ book, Overwhelming Odds, in 2006. Originally printing 200 copies for friends and family, his parents have sold 60,000+ copies, most in back-of-room sales at John’s speaking events. It was this book that first invited John to embrace his miraculous recovery and share it with the world.

John inspires 50,000+ people at 100+ events each year. He speaks to companies and organizations across industries, such as: sales, healthcare, business, safety, marketing, financial services, faith, education and insurance.

Consistently described as “the best speaker we’ve ever had,” John receives nearly 100% of his engagements from referrals. His schedule is a testament to the power of his message and who he is as an individual. His emotional story-telling, unexpected humor and authenticity make each of his presentations truly transformational.

John’s first book ON FIRE: The 7 Choices to Ignite a Radically Inspired Life was an instant #1 National Bestseller; 100,000+ copies have sold and it has been translated into 12 languages. John’s Live Inspired Podcast is a top 20 for business on iTunes & Inc. Magazine. His online community is 200,000 strong.

John considers his greatest success to be his marriage to his wife Beth, their four children and his relationships with friends and family

John’s Website

CLICK HERE REGISTER HERE

Who Can You Claim as a Dependent on Your Tax Return?

In the eyes of the IRS, “dependent” can mean much more than a biological child who lives with you.

Numerous individuals may depend on you for financial support. You might be sending money to a niece to help her through college or occasionally paying bills for an aging parent. And there are always those college kids who need extra money sometimes for books and activities and clothes.

Can you consider them “dependents” on your income tax return if you send them funds on a regular basis?

The IRS goes beyond the “nuclear family” when it defines the entry on your Form 1040, but there are limits. Here’s who you can’t claim;

  • Anyone who is not a U.S. citizen, U.S. resident alien, U.S. national, or a resident of Mexico or Canada
  • A married individual who is filing jointly as a dependent (exception granted if the person is only filing if he or she is requesting a refund of estimated or withheld tax paid)
  • Anyone – if someone is claiming you (or your spouse, if you’re filing a joint return) as a dependent

Note: As with many things IRS, there are exceptions to most rules. Questions? Ask us.

Qualifying Child

You can, however, claim a Qualifying Child as a dependent on your income tax return. In order to do so, the individual must:

  • Be your son, daughter, stepchild, foster child, brother or sister, half-brother or –sister, stepbrother or stepsister – or a descendant of anyone in those relationships.
  • Be younger than 19 at year’s end (and younger than you) or a student who is younger than 24 at the end of the year (and younger than you) or totally/permanently disabled (any age).
  • Have resided with you for more than 50 percent of the year.
  • Have depended on you for support; can’t have been responsible for greater than 50 percent of his or her own annual support.
  • Not file a joint income tax return for the related tax year (unless only to claim a refund/withheld or estimated tax paid).

Keep in mind, too, that an individual can only be considered a Qualifying Child by one person. The IRS has rules for determining who can claim the child. If you’re in this situation, we recommend you let us help you sort this issue out.

Qualifying Relative

You may also be able to claim a Qualifying Relative as a dependent. This individual must be living with or related to you, but not be anyone’s Qualifying Child. He or she must bring in less than $4,050 in annual gross income, and be supported—usually, more than half—by you. 

A Complex Issue

As you might guess, there are numerous other IRS rules legislating the claiming of a dependent on your income tax return. We’re available to address this issue and any others related to your taxes.

Year-End Check

As we close out the 2017 calendar year, we’d like to first wish you a very pleasant holiday season. We’d also like to get in some reminders of the financial tasks you should be doing in December before the tax year ends. Have you, for example:

  • Made all charitable donations?
  • Combed through your Accounts Receivable to see who needs follow-up?
  • Paid all bills through the end of the year, and reimbursed any expenses due?
  • Paid all payroll taxes?
  • Paid all estimated taxes?
  • Worked on your 2018 budget?
  • Paid all you intended to into retirement accounts?

Year-end is a good time to create the critical accounting reports you need to keep a close watch on your financial status (Balance Sheet, Cash Flow Forecast, etc.). If you haven’t been doing this regularly, and even if you have, you need to do so as we get ready to welcome 2018.

This is fairly easy to do if you’re using accounting software, but these reports can be difficult to interpret and analyze. We’ll be happy to step in and take care of these for you. We look forward to working with you in 2018!

Missed the 2016 Tax Deadline? Filing a Past-Due Tax Return

You missed the April filing deadline. What now?

For whatever reason, you didn’t file an income tax return by April 18, 2017. Don’t wait until next year, and don’t think that the IRS won’t notice. You need to do something about it now.

If you didn’t file because you didn’t think you’d have enough money to pay your tax bill (or you waited too long and simply couldn’t complete your tax preparation), you could have applied for an extension. The IRS still expects you to send in what you think you’ll owe, but if you pay at least 90 percent with the extension, you may avoid some penalties. You’ll then have six months to pay all taxes due and turn in your tax return.

At the very minimum, complete and send in the Form 4868 by the April deadline with some payment if this happens again. The IRS wants to hear from you at filing time.

It’s too late to file this for the 2016 tax year, but for future reference, this is the form you’d complete to request an individual extension. Many businesses would use the Form 7004. Both forms represent requests for six-month extensions.

Making Good

File and pay as quickly as you can, whether or not you can pay the entire amount due. That’s what the IRS says to taxpayers who missed this year’s deadline. This will minimize penalties and interest charges (the agency charges interest, a failure-to file penalty, and a failure-to-pay penalty if you owe). You may be able to avoid these if the agency accepts your reason for being delinquent.

There’s no penalty if you’re due a refund, but you must file for it within three years.

How do you file? You cannot file electronically after the extension deadline in October, either on the IRS servers or through commercial software or websites. You’ll have to file a paper return. You can either send a check along with your return or use the IRS’ online payment options. 

What if you can’t pay the total due? The IRS offers options here, including applying online to make installment payments and requesting a temporary delay.

Warning: Remember that the IRS will not send you an email or make a phone call demanding immediate payment. Such a request is part of a phishing scam.

Planning Ahead, Always

How do you keep this from happening again? Our suggestion is that you start doing tax planning year-round. Tax planning should really be a part of your overall financial planning, and it’s something you need to be thinking about all year.

We can help you in several ways here, by:

  • Working with you to understand what you should be doing every month and quarter to increase your understanding of your ongoing income tax obligation.
  • Make recommendations when your company is planning to make large purchases. We can advise you on timing and on how you should be claiming the acquisition on your tax return.
  • Going over your business expenses with you. Do you know what items should be recorded, categorized, and included when you file?
  • Creating reports that will help you calculate your quarterly estimated taxes.
  • Preparing your income taxes when the time comes.

By always considering the tax implications of your income and expenses, you accomplish three things. You make smarter purchases – and at times when you need the deduction. You’re less likely to get a big, ugly surprise at filing time. And you may well be able to minimize your obligation to the IRS.

Still sitting there with a pile of receipts and forms from an unfiled 2016 return? Let us help you get back on track.

 

How Do You File an Amended Tax Return?

Its’ easy to make mistakes when you’re doing your own tax preparation. The IRS has a special procedure for fixing them.

 

That sense of accomplishment you feel after you’ve filed your income taxes can turn quickly to dread if you realize later that you made a mistake. What do you do now?

The IRS knows that this will happen to some taxpayers every year. The tax code is so complex, and if you prepare your taxes manually, you’ve probably been shuffling a lot of papers around.

So, first: Don’t panic. You can fix this. The IRS offers what’s called an amended return, the Form 1040X, for just this type of situation.

If you’ve made a mistake on your income tax return, you’ll be able to file a Form 1040X.

What IRS forms does the 1040X cover?

If your original tax return was filed using a Form 1040, 1040A 1040EZ, 1040NR, or 1040NR-EZ, you should file a Form 1040X to amend that return.

 

What if I realize I made a math error?

The IRS will make the necessary corrections, so you usually don’t need to file an amended return. However, you should submit one if there was an error related to your filing status, income, deductions, or credits.

 

I forgot to file my Schedule B. Should I file an amended return?

Usually, no. The IRS will request missing forms and schedules from you.

 

Can I file a Form 1040X electronically?

No. You must submit a paper return.

 

How much time do I have to file a Form 1040X?

You can usually file an amended return up to three years after the date on your original income tax return or within two years of actually paying the taxes – whichever date is later. Look at the above image of the Form 1040X. You must indicate the year of the return you’re amending by checking a box or entering a year after This return is for calendar year…

 

What if my amended return entitles me to an additional refund?

Don’t file a Form 1040X until you’ve received the first refund. Once that’s in hand, you can file the amended return and cash the check. Keep in mind that it can take up to 16 weeks for the IRS to process an amended return. It may not even appear in the system for three weeks after you’ve mailed it.

The IRS Form 1040X uses a three-column approach to help you illustrate where errors have occurred. 

I realized that I owed more income tax than I sent, but it’s only March. Can I file a 1040X and include the additional funds?

Yes, as long as it’s received by the April due date for that specific year. You’ll avoid taxes and penalties.

 

Can I check on the progress of my amended return?

Yes. Go to this IRS page. You’ll need to supply your birthdate, Social Security number, and Zip code. You’ll be able to view the status of your return: received, adjusted (refund, balance due, or no changes), or completed.

 

Accuracy and Thoroughness Critical

The Form 1040X is not the most complicated of the standard IRS forms, but neither is it the simplest. It’s critical that you complete it absolutely correctly, so you don’t start having to amend your amended returns.

The completion of your Form 1040X can be delayed for a variety of reasons, including the presence of errors. It may take more than 16 weeks to process because it’s:

  • Incomplete
  • Unsigned
  • A victim of fraud or identity theft.
  • In need of additional information.

 

Avoiding Amended Returns

We can help you determine whether you need to file an amended return at all, and if so, how you should fill out the form.

If you don’t want to risk going through this whole thing again, talk to us about getting you started with year-round tax planning. It makes the whole tax preparation process (which we can handle for you, too) much easier and less stressful. We’ve worked hard with other individuals and small business to minimize their tax obligations, and we can do the same for you.

Preparing for 2017 Taxes: 5 Things You Can Do Now

Your income tax obligation needs to be on your mind year-round. Here are some ways you can get a jump on your 2017 taxes.

Summer’s over. The kids are back in school. And soon, there’ll be only three months left in 2017. If you haven’t started thinking about how to minimize your income tax obligation for this year, there’s still time.

Whether you’re a small business or an individual taxpayer, year-round tax planning is more than just a way to make tax preparation an easier, faster process. By keeping taxes in mind as you go through every 12-month period, you’ll be able to see where you might take specific actions early that will have impact on what you end up owing. Make it a habit, and you’ll find that it just comes naturally to consider the tax implications of purchase and sales decisions.

Create a System

Effective tax planning requires more than just saving receipts and organizing tax-related documents in physical or digital file folders – though that’s a good start. Create a system in early January that you can maintain throughout the year (of course, a lot of your information will be stored in your accounting or personal finance application, if you use one). But you should be saving statements, receipts, sales forms – anything related to your income and expenses that will eventually feed into IRS forms or schedules.

Evaluate Your Expense-Tracking

Businesses: How do you—and your employees, if you have them—keep track of daily expenses? You may have forms like purchase orders and bills for the big ones, but you probably buy things on occasion that are just documented by paper receipts. How do you categorize and organize these so you won’t miss any when it’s time to complete a Schedule C? Is there a better way?

Do any of your employees make trips on behalf of your business? You really should consider subscribing to an online service that automates the process of creating and approving expense reports. If you’re not aware of these options, ask us.

Know Your Tax Forms

Individuals and businesses file some of the same forms and schedules, but some, of course, are different. Your previous years’ tax returns can be good resources for you. Refer to them occasionally as you go through the year and do some comparing, especially if you must pay quarterly estimated taxes. You may not remember from year to year what’s deductible and what’s not. Revisiting your returns will jog your memory and remind you.

Consider Generosity

Are you having a good year? You’ll have an idea of how your financial health is if you’re keeping up with income and expenses. You don’t have to wait until the end of the year to do any charitable giving that you’re going to do (although it’s usually best to hold off until the fourth quarter).

Learn How Changes Will Affect Your Taxes

This is so important for individual taxpayers. Did you get married or divorced, or have a child? Did you move? Buy or sell a home? Get a raise or, conversely, lose regular income for some reason? Did you have educational expenses? All these life events—and more—can change your income tax obligation.

Businesses often experience major changes, too, and your financial state at the end of the year is way harder to predict than it is for an individual with W-2 income. Stay on top of the impact of deviations in income and expenses created by events like the introduction of new products (or the loss of existing ones), personnel fluctuations, and major acquisitions.

Comprehensive Planning

Tax planning should be an element of your overall financial planning. If you have a business or household budget, you’re way ahead of the game. You can compare your actual income and expenses every month to those you built into your budget. A budget can be a tremendous tool as you plan for the current year’s taxes. If you’ve never created one, or if you’ve never stuck to one successfully, we can help you with this.

We’d also be happy to work with you periodically throughout the year on taxes. We can get you set up with financial software if you’re not already using it and advise you on ways to work toward minimizing your 2017 obligation now.

Squire & Company Named NetSuite’s VAR of the Month

Squire has been named in the month of August, 2017, NetSuite’s VAR of the month!

Q&A with Reuben Cook at Squire & Company

 

What qualifies your company as the VAR of the month?

As we compiled the results from last year, our NetSuite practice has grown by 627% since the prior year.

 

 

What makes your company successful?

There are two things we believe to be a competitive advantage for our firm as a VAR.

First, we staff our team with individuals who are both accountants and technologists. Most of our advisors are CPAs and hold certifications in the products they support. Our clients appreciate our consultants’ understanding of both the business processes and the accounting impact as they carry out the technical configuration.

Second, we take a process-oriented approach to our implementations, which extends beyond the application itself. To ensure a successful go-live, the users should understand the business process before it enters the system, the process within the system, and what happens after the system. A lot of implementers focus their implementation around functional areas and don’t even ask about anything outside of the application. The reality, however, is that business processes span across functional areas, occur in and out of the system, and they need owners to resolve conflicting needs across the functional areas. A good example of this is the purchase of inventory. This procurement process includes Supply Chain, the Warehouse, Accounting, and may include Sales to help identify demand. When all of these functional areas are focused on the process as a team, the ERP will support their business process and not act as a distraction from it.

How are you growing your firm? How do you plan to continue to grow?

Our firm’s ERP success is primarily related to our industry specialties within the Wholesale/Distribution, Manufacturing, Software, and Direct Selling verticals.

We plan to continue this growth by identifying the unique needs of these industries and enhancing solutions specifically designed to meet their common needs. This allows us to provide the depth our clients are looking for, while allowing our resources to be used efficiently from client to client. We provide a holistic approach to include resources beyond just the ERP, including accounting, finance, compliance, tax, and strategic business needs.

What opportunities do you see in the market?

When we look at the ERP market in 2017 and beyond, there is a continued adoption and shift toward cloud solutions. There will be a tipping point soon where most decision makers for ERP initiatives within a company have used or adopted a cloud solution at a previous company. Past experience with a cloud ERP is a huge enabler for future cloud purchases. In 2016, the percentage of companies using on-premise software as a primary financial system dropped to 32 percent. Cloud ERPs are still grabbing market share from on-premise systems for the time being, but will soon be competing against itself, so identifying the best of the cloud will become even more important.

Secondly, the practice of integrating systems together is becoming more and more commonplace. Now that the technology can support effective real-time processing, businesses want their systems in a seamless ecosystem, and sometimes include their business partners within that ecosystem. The days of having independent and disparate CRM, e-commerce, ERP, and warehouse management systems are over. They need to either be under one roof or talk to each other efficiently. Par for the course is evolving and ERP implementers can either get on board or become obsolete.

 

The following article below  is from: https://www.accountingtoday.com/news/squire-company-named-netsuites-var-of-the-month 

Squire and Company, P.C. Named 2017 Accounting Today’s ‘Best Accounting Firms to Work for’

Christopher Miller                                      FOR IMMEDIATE release: 8/8/2017

Squire and Company, P.C.

801-494-6032

chrism@squire.com

Orem, UT: Squire and Company, P.C., was recently named as one of the 2017 Accounting Today’s Best Accounting Firms to Work for. Accounting Today has partnered with Best Companies Group to identify companies that have excelled in creating quality workplaces for employees.

 

This survey and awards program is designed to identify, recognize and honor the best employers in the accounting industry, benefiting the industry’s economy, workforce and businesses. The list is made up of 100 companies.

 

To be considered for participation, companies had to fulfill the following eligibility requirements:

  • Must be an accounting firm.
  • Have a facility in the United States;
  • Have a minimum of 15 employees working in the United States;
  • Must be in business a minimum of 1 year

 

Companies from across the United States entered the two-part survey process to determine Accounting Today’s Best Accounting Firms to Work for. The first part consisted of evaluating each nominated company’s workplace policies, practices, philosophy, systems and demographics. This part of the process was worth approximately 25% of the total evaluation. The second part consisted of an employee survey to measure the employee experience. This part of the process was worth approximately 75% of the total evaluation. The combined scores determined the top companies and the final ranking. Best Companies Group managed the overall registration and survey process, analyzed the data and determined the final ranking.

 

“It is a great honor to be recognized as one of the “Best Accounting Firms to Work For”.  We strive to create a culture and an environment where our team members can thrive professionally, personally and as a part of our local communities” said K. Tim Larsen, Managing Partner of Squire and Company, P.C. “Our people are our number one asset and any efforts made to facilitate growth and development are returned many times over as we serve our fantastic clients. We are constantly trying to improve our culture, our environment and the individual development of our people”.

 

For more information on Accounting Today’s Best Accounting Firms to Work for program, visit www.BestAccountingFirmsToWorkFor.com. To see the full list, visit https://www.accountingtoday.com/news/accounting-today-names-2017-best-firms-to-work-for 

 

 

 

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Tax-Deductible Expenses: Are You Recording All of Them?

2017 income tax preparation seems a long way off. Make it easier by tracking all the deductions you can take.

You’ve heard it said before: Tax planning should be a year-round process. It’s so true. Your life will be a lot easier early next year when all your tax forms start rolling in.

Forms like 1099s and W-2s do a lot of the tracking for you. You only need to transfer data over to your IRS tax forms and schedules. But what about the daily stuff, the expenses you incur as a part of your workday that no one else is documenting? There are a lot of tax-deductible costs that can really add up when it’s time to file.

The IRS has two criteria for evaluating the validity of business expenses. First, is it ordinary? Is it something that other companies in your trade or profession would commonly buy? Second, is it necessary? Is it “…helpful and appropriate?”

Warning: Some expenses that you think might be deductible are not. Obviously, you can’t claim the costs of personal items. The IRS specifies two other types of expenses that can’t be deducted: Capital Expenses and those used the calculate the Cost of Goods Sold. Questions? Ask us.

 

Pulling together all that numbers required for the IRS Schedule C can be challenging. Let us know if you have questions.

 

Here are some examples of expenses that you might not consider, but which should be recorded as they occur so you don’t forget about them come tax time.

 

Advertising and Promotion

Some of these expenses are obvious. For example, you might report printing costs for brochures, ad space bought, and postage for mailers and other business correspondence. But there’s much more that fits into this category. Think about everything you do that helps promote your business, like expenses related to:

  • Business cards
  • Team sponsorships
  • Your website (including startup and maintenance fees)
  • Graphic design
  • Workshops/webinars

 

Insurance

Do you have any kind of business insurance, like liability or malpractice? Your premiums are deductible.

 

Car and Truck Expenses

Understandably, you can only deduct expenses for miles driven for business purposes. If you have a vehicle—either owned or leased—that you also use for personal driving part of the time, you’ll need to track those two separately.

There are two options for calculating business mileage: Actual Expenses and Standard Mileage. To calculate the latter, you’d multiple the number of business miles driven by 53.5 cents for tax year 2017, then add tolls and parking fees. The Actual Expense method is more complicated; it involves many costs, and recognizes depreciation of the vehicle. Check with us if you’re planning to claim expenses for a car or truck, as there are additional rules governing this deduction.

 

Postage and Office Supplies

Yes, they’re deductible if you need them for your business.

 

Meals and Entertainment

Familiarize yourself with the rules for this one. They’re complicated, and the IRS looks closely at such deductions.

 

Business Use of Your Home

Ditto. There are all kinds of regulations, restrictions, and exceptions here, even if you use the simplified method that the IRS introduced a few years ago. Further, the home office deduction can be an audit red flag.

The rules are very specific and very rigid. For example, even if you use your home’s land line for business, you can’t deduct it. Add another line for business, and you can.

 

Professional and Legal Fees

If you pay an individual or firm for services provided to help you operate your business, those fees are often deductible. This includes lawyers, accountants, and tax preparers, of course, but as always, there are exceptions. You can’t usually, for example, deduct attorneys’ fees if you were getting legal help to buy business assets.

 

Dealing with Details

As you can see, there are many allowable business expenses that require meticulous recordkeeping. You can, of course, do this on paper or in a spreadsheet. There are cloud-based applications specifically designed for this purpose. If you’re interested in checking these out, let us know. We’re always available to help you plan for future tax filings.

 

Hired Your First Employee? Your Tax Obligations

It’s a major milestone for you, but it comes with a lot of paperwork that must be done correctly.

Bringing a new employee into your business is reason to celebrate. You’ve done well enough as a sole proprietor that you can’t handle the workload by yourself anymore.

Onboarding your first worker, though, comes with a great deal of extra effort for you at first. You have to show him or her the ropes so you can offload some of the extra weight you’ve been carrying.

But first things first. Before your employee even shows up for the first day of work, you should have assembled all the paperwork required to keep you compliant with the IRS and other federal and state agencies.

 

A New Number

As a one-person company, you’ve been using your Social Security number as your tax ID. You’re an employer now, so you’ll need an Employer Identification Number (EIN). You can apply for one here.

The IRS’s EIN Assistant walks you through the process of applying for an Employer Identification Number (EIN).

Once you’ve completed the steps in the IRS’s EIN Assistant, you’ll receive your EIN right away, and can start using it to open a business bank account, apply for a business license, etc.

You’ll also need an EIN before you start paying your employee. It’s required on the  Form W-4. If you’ve ever worked for a business yourself, you’ve probably filled out this form. As an employer now, you should provide one to your new hire on the first day. When it’s completed, it will help you determine how much federal income tax to withhold every payday. If you’re not bringing in a full-time employee but, rather, an independent contractor, you won’t be responsible for withholding and paying income taxes for that individual. You’ll need to supply him or her with a Form W-9.

Note: Payroll processing is probably the most complex element of small business accounting. If you don’t have any experience with it, you’ll probably want to use an online payroll application. After you’re set up on one of these websites, you enter the hours worked every pay period. The site calculates tax withholding and payroll taxes due, then prints or direct deposits paychecks. Let us know if you want some guidance on this.

Don’t forget about state taxes if your state requires them, and any local obligations. The IRS maintains a page with links to each state’s website. You can get information about doing business in your geographical area, which includes taxation requirements.

 

More Forms

You also have to be in contact with your state to report a new hire (same goes if you ever re-hire someone). The Small Business Administration (SBA) can be helpful here, as it is in many other aspects of managing a small business. The organization maintains a list of links to state entities here.

All employees are required to fill out a Form I-9 on the first day of a new job.

New employees must also prove that they’re legally eligible to work in the United States. To do this, they complete a Form I-9 from the Department of Homeland Security. As their employer, you’re charged with verifying that the information provided is accurate by looking at one or a combination of documents (U.S. Passport, driver’s license and birth certificate, etc.). By signing this form, you’re stating that you’ve done that.

You can also use the U.S. government’s E-Verify online tool to confirm eligibility.

 

A Helping Hand

The Department of Labor has a great website for new employers. The FirstStep Employment Law Advisor helps employers understand what DOL federal employment laws apply to them and what recordkeeping they they’re required to do.

Please consider us a resource, too, as you take on a new employee. Preparing for a complex new set of tax obligations will be a challenge. We’d like to see you get everything right from the start.