The Internal Revenue Service (IRS) provides guidance for small businesses and self-employed individuals on the necessary steps and tax responsibilities involved in hiring employees. This will make sure employers remain compliant with federal tax laws and employment regulations.

Key Requirements for Employers:

• Employee Eligibility Verification – Employers must complete Form I-9 to verify the identity and work authorization of every new employee, regardless of citizenship status.

• Social Security Number (SSN) – Employers are required to obtain each employee’s SSN to report wages accurately to the IRS.

• Form W-4 (Employee’s Withholding Certificate) – New employees must fill out this form to determine the correct amount of federal income tax withholding from their paychecks.

• Employment Taxes – Employers are responsible for withholding and paying:

  • Federal Income Tax

  • Social Security and Medicare Taxes (FICA) – Shared between employers and employees.

  • Federal Unemployment Tax Act (FUTA) Tax – Paid solely by the employer.

• Filing Requirements – Employers must file tax forms such as:

  • Form 941 – Employer’s Quarterly Federal Tax Return.

  • Form W-2 – Wage and Tax Statement provided to employees and the Social Security Administration annually.

• Recordkeeping – Employers must maintain accurate employment tax records for at least four years, including employee details, wage payments, and copies of filed tax forms.

Why It’s Important:

Properly managing these requirements helps businesses avoid penalties, maintain compliance with federal laws, and ensure smooth payroll operations.

🔗 IRS Guide for Hiring Employees