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IntroductionHere and on the linked pages we hope to provide you with background regarding issues of taxation and regulatory compliance. Books could be written on the subject so we attempt to distill only some of the most important information on the pages below. Income Splitting StrategyWe call it the income splitting strategy. Your accountant may have a different name for it. Basically it is a technique for saving money that would otherwise be spent on employment taxes. Please see our page devoted to this subject entitled Income Split. Tax Identification NumbersAs the owner of a new business you will probably have to obtain tax identification numbers most people think they are done when the get a Federal Tax Identification Number also known as an Employer Identification Number ("EIN"). However, there are at least 3 numbers you will need if you are incorporated, or if you are a sole proprietor and have employees. You will need to make application to the for an EIN, a State of Georgia Employer Identification Number, and a State of Georgia Department of Labor number. The most important number is the EIN because without it you cannot obtain a bank account. To obtain an EIN you should submit an SS-4 form. There is great news! You can now do this on line. The URL for obtaining an EIN on line is https://sa2.www4.irs.gov/sa_vign/newFormSS4.do. This was a new service in late 2003. It is far better than the older alternatives. Another way to get an EIN is to try calling 866-816-2065 with a filled out form in your hand. Try calling first thing in the morning, as early as 7:30 a.m. You stand a better chance of getting through. If you have filled out the form correctly the Service will give you an EIN right then over the phone. Another alternative is to fax it to 631-447-8960. The IRS says you will get your EIN within 4 days. To obtain a State of Georgia Employer Identification Number submit Georgia's CRF-002 form. To obtain a Georgia Department of Labor number submit a DOL-1A form. Business LicenseYou should obtain a business license. You obtain your business license from the city in which your corporation has its principal place of business or from the county if your principle place of business is in an unincorporated portion of a county. The first step is to call the appropriate county or city office. The telephone numbers are as follows.
EmployeesIf you have employees you will need to have the employee fill out at least four tax and regulatory compliance forms. At the Federal level they are the W-4 and the I-9. For Georgia you file the New Hire Reporting Form, and the G-4. You may find Publication 15, Circular E, Employers Tax Guide helpful regarding Federal tax reporting in connection with employees helpful. Georgia's Employer Tax Guide may assist you in understanding your obligations as a Georgia employer. Every time you pay your employees you will need to make certain withholdings. To calculate the amount of money to withhold from an employee's earnings you will need to refer to Publication 15, Circular E, Employers Tax Guide for the amount to be withheld for Federal income tax, Social Security, and Medicare. You should refer to Georgia's Employer Tax Guide and the Georgia Income Tax Withholding Tables for the amount of Georgia income tax to be withheld. Each month (or more or less often depending on the size of your payroll) you will have to make deposits of income tax, FICA, and unemployment taxes. You will probably need to make monthly payments using vouchers sent to you by the Internal Revenue Service and by the Georgia Department of Revenue. You will need to file quarterly statements on the Federal form 941 and the State of Georgia form DOL-4. Annually you will have to file the Federal 940 form, issue W-2 forms, a W-3 form, 1099 forms, and a 1096 form. You may find the W-2 and W-3 Instructions and the 1099 Instructions helpful.
The following websites may be helpful: Internal Revenue Service Forms
The following calendar of deadlines may be helpful: Withholding - Each pay period January 15 Most common deadline for deposit of Federal withholdings for amounts withheld in the previous month January 31 Provide 1099 forms to independent contractors Provide W-2 forms to employees File form 940 File form 945 Deposit Federal unemployment tax Most common deadline for deposit of Georgia withholdings File form 941 File DOL-4 February 15 Request new W-4 forms Most common deadline for deposit of Federal withholdings for amounts withheld in the previous month February 16 Out of date W-4 forms expire February 28 File 1099 forms with form 1096 File W-2 forms with form W-3 March 15 Most common deadline for deposit of Federal withholdings for amounts withheld in the previous month April 15 Most common deadline for deposit of Federal withholdings for amounts withheld in the previous month April 30 Deposit Federal unemployment tax Most common deadline for deposit of Georgia withholding File form 941 File DOL-4 May 15 Most common deadline for deposit of Federal withholdings for amounts withheld in the previous month June 15 Most common deadline for deposit of Federal withholdings for amounts withheld in the previous month July 15 Most common deadline for deposit of Federal withholdings for amounts withheld in the previous month July 31 Deposit Federal unemployment tax Most common deadline for deposit of Georgia withholdings File form 941 File DOL-4 August 15 Most common deadline for deposit of Federal withholdings for amounts withheld in the previous month September 15 Most common deadline for deposit of Federal withholdings for amounts withheld in the previous month October 15 Most common deadline for deposit of Federal withholdings for amounts withheld in the previous month October 31 Deposit Federal unemployment tax Most common deadline for deposit of Georgia withholdings File form 941 File DOL-4 November 15 Most common deadline for deposit of Federal withholdings for amounts withheld in the previous month December 1 Remind employees to submit new W-4 forms December 15 Most common deadline for deposit of Federal withholdings for amounts withheld in the previous month December 31 W-5 Earned Income Credit forms expire
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