Prepare the Proper Paperwork for Employees
If you do any hiring, your employees must complete Form I-9 and Form W-4. Form I-9 provides verification that each new employee is legally eligible to work in the United States. This form can be obtained at offices of U.S. Citizenship and Immigration Services, a bureau of the U.S. Department of Homeland Security or download it here. Keep this form in your files in the event an IRS inspector wants to see it.
Form W-4 indicates the employee's filing status and withholding allowances. These allowances are used to determine how much federal income tax to withhold from an employee's wages. The IRS can provide you with a tax table to determine the withholding amounts for your employees. To receive a copy of this table, call the IRS and ask for Circular E and the supplement to Circular E or visit the IRS Web site.
Excerpted from Start Your Own Business