It will take you about seven minutes to read this, and during that time, somewhere in the country seven small business managers are trying to work out what a IRS W-4 form is and how to master it. Yearly, in excess of 553,000 new employers wrestle with all the mandatory employment papers, including the W-4, and every one probably wishes they had a little bit help. With the pace of employer businesses and organizations starting up, there’s definitely room for it.
It goes without saying that your job isn’t writing paychecks and completing IRS documents, that’s not the reason you are in business. Even though you can (and really should) use outside agencies and let other people handle the majority of the admin job related to operating your corporation, you must know your way around an IRS form W-4. Reaching for the Rolaids? We won’t get too far down into all the nitty-gritty, honest. At least not too much. 
Virtually all of us have seen and used one, but do you actually know what the W-4 form is designed for? Are you aware it is the document you will be making use of almost every week that you employ anybody else? It includes all the tax information required to calculate the payroll for your employees. The form has to contain marital filing status, number of dependents claimed, as well as any supplemental money which needs to be subtracted per week for income taxes.
Because you use what’s on it so much, the data on the form is actually more important than the form itself. You can record the details down on a piece of paper and take a look at it weekly and never look at the W-4 again. In fact, this is what most companies do. They take the data right from the document and enter it into their web based payroll software.
If you want to, you can even create your very own customized W-4 to use in your company — but you have to have better things to do with your time. There is a standard form and a standard set of operating instructions. Keep it simple, silly.
Not much of a paperwork person? There’s also a digital version of the W-4 that your employees can get over the web. If you work with an online payroll system, they’re able to do all of that without your being involved at all. Virtually all online programs allow them to log in and change their own data without your employees needing to locate you and fill out the form.
Next point: although you’re the person making use of it, the worker owns his own data, so he could need to change it quite often. There’s no constraint for the number of times an employee can modify information on his IRS W-4 form. The government says they should consider it each year as they submit their income taxes, but there are no hard and fast rules.
Hiring foreign people will not help with the paperwork. Just makes it worse. Even when they are not a resident they will need to fill out a W-4 so long as they are an employee. The Internal Revenue Service wishes to monitor their tax situation. Realize that you’ll find heaps of different special regulations here involving treaty countries and what sort of labor they complete and where they get it done. But a majority of the time they’ll complete a W-4 or a 8233 NRA Withholding Exemption Form. For everybody who is from one of the treaty countries, they’ll just complete your 8233 and file themselves as exempt. Otherwise they’re on a W-4 and they’re getting payroll taxes taken out like everybody else.
Seems confusing? Wondering as an employer if you can get into trouble for badly-completed forms? Never fear! It isn’t that frightening at all. It’s not necessary to verify the W-4 form for accuracy, however, if you suspect something is incorrect you’ll want to advise the employee that the form appears to be erroneous. The IRS may not like it and may come and do things to them they will not like, including having you take extra money our of their paycheck. There’s even a $500 penalty for loading up your W-4 with deductions that you aren’t eligible to have. I haven’t heard of it ever being used, but you never know. If all else fails, you’ve got an unreadable W-4 or the form you have is really terrible, you should withhold for that employee just like they were unmarried and only had a single deduction. That way they are able to get a pay check. Then work it out as time allows. Don’t let a bad W-4 get in the way of paying an employee.
Being able to read printed forms is actually not something everybody can do. Language can be a problem too. When hiring you can find people who have a different native tongue and also those that are functionally illiterate. You need to handle this very diplomatically. Focus on anyone experiencing difficultly finishing the form, offering to read and fill it out for them if they want. You shouldn’t give them any trouble about it. If they know Spanish, the Internal Revenue Service has Spanish forms and assistance available.
If you are like other business owners, you’ll never totally become a Jedi Master of IRS paperwork, but knowing your way around the parts of a W-4 is an outstanding starting point for learning all of the other things involved with the care and feeding of employees.
If you’re ramping up on payroll whether you like it or not, be sure to check out the author’s website about paycheck stubs and other hazards of modern business. Or you might want to check out the steam-of-consciousness tumblr account where things like finding paycheck stub samples when you’re in a bind and free paycheck stub downloads are discussed.