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Keeping updated personal and tax information for employeesAs an employer you know just how much paperwork is required anytime that you hire an employee. But what you might not be aware of is why this paperwork is so important. Basically the potential employee needs to fill out all of that paperwork so they can work for you legitimately; in fact the government requires you to have a new employee file out various things in the paperwork department.One of the main reasons that they need to fill out all of this information is because of taxes. In the United States you as an employer need to file certain things with the IRS, including all of your employees and their personal information. And the only way to do this is to have your employees fill out the paperwork when they get hired.
In fact the government provides you with a form that you need to have the employees fill out, which is the W-4. This paper is actually very important because of the fact that you need to file it with the IRS and it also helps you determine the amount of taxes that you need to withhold form the employees paycheck each week. But not only do the employees need to fill out the W-4 each year, you also need to file a W-2 with the IRS each year on all of your employees. On the W-2 you need to make sure that you have their postal address and other personal information. So because of this it is very important to make sure that you keep updated personal and tax information on each employee. The best thing that you can do to make sure that you have the most current information, both personal and tax information, is to have your employees update their information on a yearly basis. The perfect time to have them update their personal information is when they are updating their tax information, which by law is required every year. But you also need to make sure that in your company's policy manual that you have a policy that requires your employees to update their personal information any time that they move. This will help to ensure that you are notified of the move before it is time to file taxes. Here is a list of information that you as an employer must keep on each employee that you hire.
Something that you want to keep in mind when it comes to having this paperwork is that you need to make sure that you keep it for a certain period of time. Most tax information has to be kept for a period of seven years, but it is generally recommended that you keep personal and tax information on each employee for at least six years.
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