II. Additionally, employers are responsible for completing

the following forms:

1. Form I-9 (Employment Eligibility Verification) : The employer and employee must both complete this form to verify that each new employee is legally eligible to work in the United States.

2. Form W-4 (Employee’s Withholding Allowance Certificate): Each employee must complete this form. The employer will use the filing status and withholding allowances shown on the form to figure the amount of income tax to withhold from the wages of their employees.

3. Form W-2 (Wage and Tax Statement): The employer must give each employee a W-2 after the end of the calendar year. Copies are to be sent to the Social Security Administration.

III. Employers should also do the following:

1. Register with the Department of Revenue to withhold income tax from the wages of their employees.

2. Check with the Worker’s Compensation Commission to determine if the business is required to pay Worker’s Compensation.

3. Register with the South Carolina Employment Security Commission to report and pay unemployment insurance for employees.

4. Employers can also go to www.myscgov.com, click on business and go to SCBOS for more information.

Employer identification number (ein)

The EIN number is a 9-digit number that the IRS uses to identify the tax accounts of employers, certain sole proprietorships, corporations, partnerships and other entities. (An LLC will fall under the category of either a partnership or corporation). EIN numbers can be obtained online, by telephone, fax, or regular mail. Employers will need to obtain an EIN if any of the following applies to their situation:

1. The business has employees

2. The business has a qualified retirement plan

3. The business is operated as a Corporation or Partnership (includes LLC’s), or

4. The employer files returns for:

   1. employment taxes, or

   2. excise taxes

XI.

Recordkeeping

1. Why should you keep records?

1. To keep track of how your business is progressing

2. Help you prepare your financial statements

3. Identify where your money came from

4. Help keep track of your deductible expenses

5. Maintain records that will support the items on your tax return

2. What type of records should you keep?

   1. Develop and maintain a system that will clearly show your income and expenses for the tax year.

   2. If you maintain more than one business—keep separate records for each business.

   3. Your recordkeeping system should include a summary of your business transactions.

   4. Your books must show your gross income, your deductions and your credits. (For most small businesses- the main source for entries in the business books is the business checkbook)

   5. You must also keep supporting documents.