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Federal

Except where noted, all forms available at www.irs.gov.

• File form SS-4 and obtain an Employer Identification Number (EIN).
• Each employee must fill out a W-4, the employee withholding form, and an I-9 Employment Eligibility Verification form.
•  For each pay period (weekly, bi-monthly or monthly, etc.), you need to calculate and deduct employees' income tax, social security and medicare amounts.  Each quarter, you'll file a form form 941 to report your payments.  You can file form 941 and make your payments on the IRS website.
• Shortly after the end of the calendar year, you'll file a Wage and Tax Statement (W-2) for each employee and a Transmittal of Wage and Tax Statement (W-3 form).  You'll also file form 945, the Annual Return of Withheld Federal Income Tax.
• Some businesses, such as those with employees who receive tips, are required to file additional information.  Check with your tax accountant or visit www.irs.gov.
• If you are self-employed (i.e., no employees), you must pay the self-employment tax.  Use schedule SE with your annual 1040 tax return.  See www.irs.gov for information.

State

Except where noted, all forms available at www.state.vt.us/tax or call (802) 828·2551.

• When you file an S-1, Vermont Application for Business Tax Account, you need to request a withholding tax account if you plan on employing.  The State will send you an Employer Withholding return booklet for reporting along with a schedule and formula for calculating the deductions.
• Each employee must fill out form W-4VT.
• As an employer, you must file wage reports on a quarterly basis even if no wages were paid in a quarter.  An Employer's Quarterly Wage & Contribution Report (form C-101) is mailed to each taxable and reimbursable employer during the last week of each calendar quarter.
• Workers' Compensation insurance must be purchased.  Contact an insurance agent.  For information on Workers Compensation, visit http://www.labor.vermont.gov or call (802) 828·2288.
• Check with VOSHA (Occupational Health & Safety) for additional regulations that may apply to your company.  Call (802) 828·2288.

Advice

Have a conversation with a tax accountant.  Consider hiring a professional for your tax needs.   You might save a bundle in aspirin costs.  An alternative to managing your company's payroll and tax filings would be to hire a payroll service to handle all your employee-related tax documents.