Am I in Compliance?

HAS has provided the following tips to help business owners remain in compliance with tax and other issues.

 

Employment Issues:

• Federal, State and City (if applicable) Form W-4 Withholding Allowance Certificates

Employers should have their employees fill out this form each year and forward the form to the payroll department or payroll processor and retain a copy in their personnel file.  Completing these forms annually ensures the employee of having the proper amount of income tax withheld from their paychecks.  An employee may submit Form W-4 anytime during the year if the number of allowances they claim changes.

Form W-4 expires each year for employees claiming to be exempt from federal income tax withholding.  By February 15 of each year ask the employee to fill out a new Form W-4 for the current year.  If the employee does not submit the form, on February 16 you must begin withholding federal income tax as if he or she is single with zero withholding allowances on the next pay date.

 

• Form I-9 Employment Eligibility Verification

Completion of this form is required to verify that each new employee is legally eligible to work in the United States. Each employee must complete the form and provide you with the proper identification documents which can be photo copied.  Retain Form I-9 in your personnel file for either three years after the date of hire of for one year after employment is terminated, whichever is later.  The form must be available for inspection by authorized US Government officials (e.g. Dept of Homeland Security, Department of Labor, Office of Special Counsel)

 

• State of Michigan New Hire Reporting Form

Employers are required to report any new employee to their state’s new hire registry.  This form is recommended for use by all Michigan employers who do not report electronically.  Reporting is available online at www.mi-newhire.com 

Retain a copy of this form in your personnel file.

 

Sales and Use Tax Issues:

• Michigan Sales and Use Tax Certificate of Exemption

This form is necessary for the Seller’s records.  Sellers are required to pay sales tax on the sale of their goods.  This form, to be completed by the Purchaser, certifies exemption from sales and use taxes by the Purchaser and therefore releases the sales tax liability from the Seller. 

 

• Use Tax Liability

Purchases of goods from out of state vendors may be subject to use tax in the State of Michigan.  Purchases must be tracked internally and a determination made of use tax liability.  Report and pay your use tax liability using MI Form 160 Monthly / Quarterly Combined Return for MI Taxes or, if you are an annual filer, MI Form 165 Annual Return for Sales, Use and Withholding Taxes.

 

Miscellaneous: 

• Form W-9 Request for Taxpayer Identification Number and certification

This form is required from persons or businesses to which payments of $600 or more was paid for services, rent and other income.  The payer is required by the IRS to provide Form 1099-Misc by January 31 of each year for the preceding calendar year of payments.