Learning how to navigate the tax advantages of running your own business can be an education--but at least you stand to gain from the lessons. Understanding your responsibilities to Uncle Sam once you start hiring is another thing altogether. Fortunately, the government wants to make it easy; hence the Simplified Tax and Wage Reporting System (STAWRS). Think of it as painting by numbers, only with taxes.
STAWRS--a joint effort of the SBA, the Department of Labor, the Treasury Department, the IRS, the Office of Management and Budget, and the Social Security Administration--was established to reduce employers' tax- and wage-reporting burden through improving the current reporting processes. In other words, STAWRS allows you to significantly cut the risk of over- and underwithholding employees' taxes and social-security contributions. An entire section of the site is dedicated to startups and what new businesses need to know about their tax obligations.
STAWRS' "One-Stop Guide for Businesses" (http://www.tax.gov/ ) provides general tax information, includes a flowchart depicting basic business events that require tax and wage reporting, offers a list summarizing your basic responsibilities as an employer and refers to other tax-related publications that contain more detailed information. Much of the information in this guide refers to the federal tax requirements; however, the site also includes links to tax- and wage-reporting requirements for each state.