The prospect of running a sustainable real estate enterprise by yourself can be intimidating – to say the least. Investing in real estate requires a vast amount of knowledge and a studious work ethic. Those that exhibit these characteristics are more inclined to experience success in this industry. However, success is often accompanied by an increased workload. The further your business progresses, the more enticing it is to consider hiring additional help. In fact, having a competent real estate investing team is critical to success. If your business is booming, but you are struggling to keep up, perhaps it’s time to hire some help.
Hiring your first employee can be an exciting time. It means you have enough business to warrant an additional salary. It also means that expansion is inevitable. All things considered, hiring another employee means things are headed in the right direction. However, in bringing on help, there are certain steps you must follow. You can’t simply hire someone and leave it at that.
Use the following steps to start the hiring process and ensure you are compliant with key federal and state regulations:
Step 1: Get an Employer Identification Number (EIN)
Before you even consider taking on your first employee, your real estate investment company needs to obtain the proper documentation from the U.S. Internal Revenue Service (IRS). In other words, you need to fill out a form so that the IRS can give you an employment identification number (EIN). Otherwise known as an Employer Tax ID, or simply an SS-4 Form, the EIN makes it possible for the IRS to recognize you as a taxable business. Subsequently, the EIN is required should you need to report any employees to state agencies. In fact, this ID is necessary for reporting taxes to the IRS. Without it, you will be in violation of government regulations the second you hire an employee. You can apply for an EIN online or contact the IRS over the phone.
Step 2: Set up Records for Withholding Taxes
The second step in making sure you are prepared to hire an employee is centered on record-keeping. In fact, the IRS requires employers to keep the records of employment taxes for a minimum of four years. The following represents three types of withholding taxes that businesses need to be retaining for at least four years:
As a real estate investor looking to hire employees, be sure to keep these documents on record for a minimum of 4 years.
Step 3: Employee Eligibility Verification
Employers must be able to verify that their respective employees are eligible to work within the United States. It doesn’t matter if you are in San Diego or Miami, employees need to prove they are a U.S. citizen. Therefore, within three days of being hired, employees must be able to provide the appropriate documentation that confirms U.S. citizenship. It is up to the employer, however, to go over the documents provided.
There is one document, in particular, that employers need to have filled out: Form I-9 (employment eligibility verification). When you receive this document, it is up to you to confirm the employee’s citizenship or eligibility to work in the United States. However, it is important to note that employers can only request verification documents specified on the I-9 form. While employers are not required to submit the I-9 Form to the federal government, they do need to keep them on file for a minimum of three years.
Step 4: Register with Your State’s New Hire Reporting Program
If you are a real estate investor looking to hire your first employee, you need to register with your local New Hire Reporting Program. That is to say; within 20 days of the hire date, the new employee must be added to a state directory that identifies their status as an employee. For a list of states, and their individual requirements, please visit U.S. Small Business Administration (SBA).
Step 5: Provide Workers’ Compensation
Regardless of where your business is located, you are required to carry workers’ compensation insurance for your employees. This can either be through a commercial carrier, a state program, or on a self-insured basis.
Step 6: Post Required Notices
As an employer with a physical workplace, it is up to you to post required notices. Accordingly, you must post certain posters that identify employee rights and employer responsibilities. These posters identify the labor laws of each state and must be visible to all employees.
Step 7: File Taxes
For the most part, employers who pay wages subject to income tax withholding, Social Security and Medicare taxes must file IRS Form 941, Employer’s Quarterly Federal Tax Return.
See more at: http://www.fortunebuilders.com/7-steps-to-hiring-your-first-employee/