Complying with IRS Regulations
When you begin the search for employees, you must ensure that you complete all the necessary documentation in order to comply with IRS regulations. The following are three tasks you must complete before adding someone to your payroll:
1. Ensure Eligibility to Work in the US. To verify an employee’s ability to work in the United States, require him/her to fill out IRS Form I-9, Employment Eligibility Verification. This government form, provided by the office of US Citizenship and Immigration Services, enables employers to determine whether an individual is authorized to work in the states.
2. Secure Social Security Number. In order to complete the W-2 form, you must secure each employee’s name and social security number (SSN). You can make a copy of the card for your own records, although this documentation is not required. The IRS website offers the following clarification: “Do not accept an ITIN in place of an SSN for employee identification or for work. An ITIN is only available to resident and nonresident aliens who are not eligible for U.S. employment and need identification for other tax purposes. You can identify an ITIN because it is a 9-digit number, beginning with the number “9″ and is formatted like an SSN (NNN-NN-NNN).”
3. Determine Employee’s Withholding. Each employee must submit a W-4 form, Employee’s Withholding Allowance Certificate, which you must keep on file. This is where employees state their filing status and withholding allowances which determine the amount of income tax withholding from their paychecks. The submitted form remains on file until the employee replaces it with an updated W-4. As declared by the IRS, “If employees claim exemption from income tax withholding, they must give you a new Form W-4 each year.” The W-4 becomes effective with the first wage payment following form submission.
While you may be aware of these regulations, your clients may not be, and failure to comply can cost them in the long-run. Consider providing them with a tip sheet that notes these three tasks, or refer them to the IRS website for more information.
Universal’s IRS-Approved Tax Training Will Help Meet IRS Regulations
Universal Accounting recently announced its approval as an IRS Continuing Education Provider, enabling individuals desiring to become Registered Tax Return Preparers to fulfill their CE requirements through Universal’s self-study and online tax courses.
The IRS oversees the approval of all CE providers. Because Universal’s tax training was already recognized as a sponsor of Quality Assurance Service (QAS) self-study courses after meeting the National Association of State Boards of Accountancy’s (NASBA) rigorous standards, the Professional Tax Preparer program was easily adopted by the IRS. Universal is happy to join the ranks of IRS-approved Continuing Education Providers and is confident that their tax training will enable countless graduates to advance their careers in the finance industry.
If you would like to learn how the Professional Tax Program can enhance your career, call Universal Accounting at 1-877-833-7909.
