Use W-4s to calculate your employee's paychecks correctly.

The IRS requires all new employees to fill out form W-4, which asks employees to state their marital status and how many tax allowances they will claim. Based on the number of allowances they claim, employers can determine the amount of federal income tax to withhold from the employee's paycheck.

Each new employee should complete form W-4 on his or her start date. Your employees can always give you a revised W-4 if there is a change in their tax situation, like getting married or having a child.

You must keep a W-4 on file for each active employee and keep this document for 4 years after an employee leaves or is terminated. Generally, employers do not need to send a copy of the W-4 to the IRS unless notified to do so by the IRS.

You can find form W-4 on the IRS website.

An I-9 form helps you verify an employee's eligibility to work in the United States.

Form I-9 (Employment Eligibility Verification) is used to document your employee's eligibility to work in the United States. This form asks employers to review certain identity documents, like a driver's license, Social Security card, or a U.S. passport. Although you are not required to, it's a good idea to photocopy these documents and keep them in your files.

US Citizenship and Immigration Services (USCIS) requires all new employees to fill out form I-9.

What do I do with it? Although you don't need to send I-9 forms to anyone, you'll need to have a form on file for every current employee in case it's requested. If an employee leaves or is terminated, you'll need to keep a copy of their I-9 on file for 3 years after their hire date or 1 year after they leave, whichever is longer.

You can find form I-9 on the USCIS website.

All employers are required to report new hires to the state.

All employers are required to report new hires to the state; some states also require reporting of independent contractors. Your state needs to know whom you hire in order to aid in the collection of child support and to monitor unemployment compensation, workers' compensation, and other public programs. In most states you can provide a copy of the employee's W-4 form to report the new hire to the state. If you do not report your new hire to the state within the given amount of time, you may face a penalty. Check with your state for specific new hire reporting requirements.

If you have one or more employees, your business must comply with federal and state labor laws.

Labor law posters publicize information for employees like the minimum wage and overtime pay standards. If your business has one or more employees, it is governed by U.S. state and federal labor laws.

These posters are not artifacts of the Industrial Age or required only in factories. In order to be compliant with the labor law regulations, even in a small office, labor law posters must be placed where employees can see them.

They typically cost under $100.

Each state has its own set of specific labor laws and it's the employer's responsibility to have up-to-date posters.

Employers who do not comply with state laws risk fines and lawsuits.

Posters are made by third parties, not the government. You can easily order compliance posters online from sites like the Compliance Poster Company.

Protect your business if a worker gets injured on the job.

What is workers' compensation insurance and why do I need it? Required for almost all employers, workers' compensation insurance is insurance meant to protect your company from liabilities in case a worker suffers an injury while on the job. The premium you pay depends on the category of your employee. Without adequate workers' compensation insurance, if one of your employees is injured on the job, you may be held personally liable for both the cost of their medical care and for the lost wages while the employee is unable to work.

To learn more about what is required in your state check out the Office of Workers' Compensation Programs.

Will I need to make a large down payment? No. Some services, such as The Hartford's XactPAY Web^SM service, enable you to pay your workers' compensation premiums one payroll at a time, eliminating down payments. The The Hartford's XactPAY Web^SM service is free to Intuit QuickBooks Payroll subscribers with Hartford-issued workers' compensation policies.