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The following are explanations of commonly used business
terms, most of which appear on this site.
A
B C D
E F G
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L M N
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P Q R
S T
U V W X Y
Z
Administrative
Dissolution: Corporations and
LLCs must file an annual report with the Idaho Secretary of State's office. The
form is mailed to the business's address of record and cannot be forwarded by
the Post Office. If the form is not returned by the due date, the Secretary of
State will withdraw the business's right to operate in Idaho.
Annual Budget:
For an existing business, this is a realistic budget for the current
fiscal year based on past income and expenditures.
It includes anticipated changes in income and spending that may occur
during the year. For a start-up
business, this is a realistic projection of the income and costs of doing
business for a year.
Auditorium District Tax:
See Greater
Boise Auditorium District Tax below.
Bar Codes:
See UPC Codes
below.
Beer and Wine Taxes:
Taxes on these products are remitted by wholesalers to the Idaho State Tax
Commission. Wholesale permit numbers are required. For more information, see the
Taxes section of this Web site.
Bridge Loan:
A short-term loan, usually
associated with the purchase or remodel of real estate and usually for a term of
less than one year. It enables a borrower to close quickly and later work out permanent funding.
Business License:
A license to do
business in a specific city or county. Some cities in Idaho require all
businesses to obtain a license. Others license only certain activities, such as
taxis and eating and drinking establishments. City business licenses are obtained from the city
clerk's office. County business licenses are obtained from the county clerk's
office. Idaho does not have a state business license. (Note:
Obtaining a business license is not the same as registering a business legal
form (entity) or name, both of which are administered by the Secretary of State's office.)
Business Plan:
A business plan contains all the information about your business: name, location, number of employees, how the business is organized,
management team, the business’s purpose, products and/or services and how they
will be rendered, target markets, equipment needs, financial projections, and any other pertinent
information. Anything you can think
of pertaining to your business should be included in your business plan. The
marketing plan may be included as well.
You will need a detailed business plan that includes financial
statements before approaching a
lender.
Every business should have a business plan; it is a planning tool to keep the business
organized and focused. The plan should be regularly updated as the
business grows and changes.
Cash Flow Projections: A month-by-month future projection of income and expenditures
over a period of time, usually a year. The
projections for an existing business are based on current cash flow patterns.
A cash flow projection for an existing business can be created with more
than one anticipated outcome. For instance, you might create a projection of
income and expenditures if business increases by 5%, another for an increase of
7%, and another for an increase of 10%. Cash
flow projections enable business owners to anticipate future funding needs
compared to anticipated income. Your
accountant can assist in preparing this.
A
cash flow projection for a start-up anticipates monthly income and expenditures
over a period of time, usually a year. The
statement can be created with more than one outcome, based on anticipated sales
and expenditures, but be conservative in estimating anticipated income.
Cigarette and Tobacco Taxes:
Taxes on these products are remitted by wholesalers to the Idaho State
Tax Commission. Wholesale permit numbers are required. For more information, see
the Taxes
section of this Web site.
City Sales Tax:
A local option
tax collected by a city in addition to the state
sales tax. For a list of cities that collect local sales tax, visit
http://tax.idaho.gov/s-results-quest.cfm?faq=146.
Coin Operated Amusement Device Annual Decals:
Sales tax is prepaid on coin-operated amusement devices (such as video
games) by the
owner, who purchases a yearly "amusement device decal" from the State
Tax Commission for each
amusement device.
Completed Operations (Errors and Omissions)
Insurance: CPAs,
architects and other licensed
professionals may need this insurance to protect against financial loss to
clients caused by errors or
omissions in the service provided to the client.
Contents Insurance
Covers inventory, supplies and equipment in a rented building. The building
owner should have property insurance to cover the actual building.
Cookie: A small
piece of information sent by a Web server (the site you are viewing) and stored on a Web browser
(your computer) so it can
later be read back from that browser. This is useful because the browser "remembers" bits of specific
information, such as your choices when filling out a form or survey. Some
cookies are temporary; others are permanent and you must remove them from your
computer when you delete files. This Web site uses temporary cookies to remember
your selections when you go through the Business Wizard or the Resource Wizard.
County Sales Tax: A sales tax
collected by a county in addition to the state sales tax. Nez Perce
County collects a .5% local option sales tax which is administered by the Idaho
State Tax Commission.
Direct Payment:
You can pay your Idaho taxes by electronic payment at
http://tax.idaho.gov/i-1042.cfm.
ACH sign-up is required for ACH debit or credit.
Employee: Same as
"worker;" a person who has entered into the employment of, or
who provides a service for an employer for payment. An employer usually has the right
of control over how, when, and where an employee performs her/his duties.
Employer: Someone
who hires others to work for them in a business, trade, or profession.
Employer
Identification Number
(EIN):
All businesses (except sole proprietorships with no employees) must obtain a Federal Employer Identification Number (EIN),
also called a Tax Identification Number. This number
is used when
your business reports employee tax withholdings and files tax returns. Your bank
and/or corporations
and businesses for whom you perform work may require you to have an EIN even if you are a sole
proprietor without employees. You must provide your EIN number if they are required to
include it on their tax returns. For more information, see
the following IRS publications:
Apply for
an Employer Identification Number On-line and
Publication 1635,
Understanding Your EIN.
If you change your business name or
entity type, you may need to obtain a new EIN. For information, click on the
links above.
Idaho does not issue a state EIN.
Your federal number is used for Idaho business income tax purposes. However,
Idaho does issue permits and accounts, such as sales tax or Idaho income tax
withholding. To apply, use form IBR-1 found at
https://labor.idaho.gov/applications/ibrs/ibr.aspx.
Employment Practices Liability Insurance (EPLI):
Protects against wrongful termination and discrimination lawsuits.
Employment
Taxes:
All employers are required to withhold certain federal and
state taxes from employee earnings, including:
-
Federal
Income Tax
-
Social
Security and Medicare Taxes (FICA)
-
Federal
Unemployment (FUTA) Taxes
-
State Income Tax
-
State Unemployment (SUTA) Taxes
For
information on your federal tax responsibilities as an employer, see IRS
Publication
15, Circular E, Employer’s Tax Guide. If
you have agricultural employees, see IRS
Publication
51, Circular A, Agricultural Employer’s Tax Guide.
For information on state tax withholding, visit
http://tax.idaho.gov/i-1026.cfm.
If you are not sure whether people working for you are
employees or independent
contractors, see IRS Publication
15-A, Employer’s Supplemental Tax Guide.
Estate Tax:
Estate tax is charged on the
transfer of property after the death of the original property owner. For information about Idaho
estate tax (for deaths occurring prior to 2005) visit
http://tax.idaho.gov/.
For information on Federal estate tax, visit http://www.irs.gov/businesses/small/article/0,,id=98968,00.html.
Estimated
Income Tax
(Federal):
Estimated tax payments must be made by individuals
who expect to owe tax of $1,000 or more on their personal income tax return and
who do not have at least 90% of the tax withheld by an employer. Sole proprietors, owners of limited liability companies, members of
partnerships, and S corporation shareholders may need to pay estimated taxes.
Individuals receiving income from interest, dividends, rental property,
royalties and other forms of passive income may also need to pay estimated taxes. Payments are made four times a year using form 1040-ES, Estimated Tax for
Individuals. For information,
see IRS
Publication
505, Tax Withholding and Estimated Tax.
Estimated
Income Tax
(Idaho):
Individuals are not required to make state quarterly estimated tax payments,
though they may do so voluntarily to reduce their state tax liability. To pay
state estimated taxes, you will need to complete Form 51, Estimate of Idaho
Individual Income Tax. For information and to obtain the form, visit
http://tax.idaho.gov/.
Estimated Income Tax (Corporations):
Corporations that expect to owe $500 or more in federal taxes must make
estimated income tax payments. For information, see
http://www.irs.gov/publications/p542/index.html
and
http://www.irs.gov/businesses/small/article/0,,id=110413,00.html.
Corporations may also be required to pay quarterly estimated
taxes to the
Idaho State
Tax Commission. For
information, visit
http://tax.idaho.gov/forms/EFO00026_08-26-2009.pdf.
Excise
Taxes: The
Internal Revenue Service collects federal excise
tax on the following:
-
Telephone
communications
-
Air
transportation
-
Motor
fuels
-
Heavy
truck sales
-
Windfall
profit tax on domestic crude oil production
-
Environmental
tax on the receipt of hazardous materials
-
Environmental
tax on manufacturing petroleum and chemicals
-
Highway
use tax by heavy trucks and buses
-
Production,
sale, or importing of alcohol, tobacco, or firearms
-
Luxury
tax on the purchase of high-end passenger cars, yachts, and other consumer luxury goods
Excise tax is also collected on some
activities, such as the use of indoor tanning salons. For
more information on federal excise taxes, see http://www.irs.gov/businesses/small/article/0,,id=99517,00.html
and
IRS
Publication 510.
Exempt Employee :
An employee who is exempt from overtime
payments, often a supervisor or one who travels regularly for business, such as
a salesperson. Federal regulations, not the employer, determine whether an
employee is exempt or non-exempt from overtime pay.
Factoring:
A method of raising working capital by selling a business's accounts receivables
to a bank or another lender at a discounted rate. The purchaser then manages and collects payments.
Federal
Tax Deposit Coupon:
Coupons
are used for depositing employment taxes. Each
coupon shows the deposit amount, the type of tax, the period for which the deposit
is made and your phone number. A
coupon book will be automatically sent by the IRS about six weeks after a business
applies for an Employer Identification Number (EIN). If you have no employees,
you can then cancel it.
Federal
Unemployment Tax
(FUTA):
The
federal unemployment tax is part of the federal and state program that pays
unemployment compensation to workers who lose their jobs.
Only the employer pays FUTA tax; no funds are withheld from an employee’s
pay. Payments are made using IRS
Form
940 or 940-EZ, Employer’s Annual Federal Unemployment (FUTA) Tax Return.
These taxes are used to administer the Unemployment Insurance and Employment
Services Programs in Idaho and other states.
FICA:
The Federal Insurance Contributions Act
(FICA) tax is a tax imposed by the federal government on both employees and
employers to fund Social Security and Medicare. A portion of the tax is withheld
from employee earnings and remitted to the IRS. Employers also contribute a
portion of the tax. Self-employed individuals contribute to Social Security and
Medicare by paying
self-employment tax
on their net earnings.
Fidelity Bond:
A type of insurance that protects employers against
employee dishonesty, theft, negligence, fraud and/or embezzlement. Employees
who have direct access to a company's cash, securities, and accounting records, and those who handle investment funds, should be bonded.
Specialty fidelity bonds can be purchased, such as ones covering janitorial
services or trust or pension fund managers. Fidelity bonds are purchased from insurance companies.
Financial
Statements:
Statements
detailing the business’s financial status. These
include an income
statement, balance sheet, and cash flow statements, and may include other
statements appropriate for your business, such as accounts receivable and
accounts payable statements. Your
accountant can prepare these, or, if you use accounting software such as
QuickBooks, the software can be used to prepare the statements.
First
Degree of Consanguinity :
A near relative of an employer who
is exempt from Worker's Compensation coverage. For a list of exemptions, see
Worker's
Compensation Exemptions.
Foreign Corporation or LLC:
A
corporation or LLC originally registered in another state
that is registered to do business in Idaho.
Gambling,
Wagering, and Betting Ta xes:
Businesses
that accept bets, sell lottery tickets, or run a betting pool or lottery must register with the
Internal Revenue Service and pay an occupational tax and an excise tax on
wagering. To register and pay
the occupational tax, use IRS
Form
11-C, Occupational Tax and Registration Return for Wagering.
To figure tax on bets
received,
use
IRS
Form
730, Monthly Tax Return for Wagers.
Gambling, wagering, and betting occurring
on Reservations in Idaho is controlled by the National Indian Gaming Commission,
http://www.nigc.gov/.
Gasoline and Fuels
Taxes:
For
information, refer to
http://tax.idaho.gov/.
Idaho is a member of the International Fuels Tax
Agreement (IFTA), which provides a cooperative and simplified reporting system
for interstate motor carriers.
Gift Tax:
A tax on gifts
of money or property given during the lifetime of the giver. The one who gives
the gift pays the tax, not the recipient. For information, see
http://www.irs.gov/businesses/small/article/0,,id=98968,00.html
Greater
Boise Auditorium
District Tax:
In addition to the
Idaho sales tax and the statewide
travel and convention tax, a Greater Boise Auditorium District
tax (lodging tax) is imposed on the user or occupant of a hotel or motel room in the
Boise metropolitan area. For information visit
http://tax.idaho.gov/.
Heavy
Vehicle Use Tax:
Trucks,
truck tractors, and buses having a gross weight of 55,000 pounds or more
must pay a federal excise tax. The
tax is reported on IRS
Form
2290, Heavy Vehicle Use Tax Return.
Hotel/Motel
Tax :
See
Travel and Convention
Hotel/Motel Taxes
below
Idaho
Business and Individual Income Taxes:
Businesses and individuals must pay both federal and state income tax. The Idaho individual income tax rates range from 1.6% to 7.8%. The corporate income tax rate is 7.6%.
For information visit http://tax.idaho.gov/
and
http://tax.idaho.gov/i-1044.cfm.
Information on federal tax for individuals is available at
http://www.irs.gov/pub/irs-pdf/p17.pdf.
Identification
Number for Tax Reporting:
All businesses
and owners must have a taxpayer identification number for the proper processing of tax returns.
Sole
proprietors not having employees may be able to use their Social Security
number. Other
companies must use their
Employer Identification Number
(EIN).
You must include your identification number on all tax returns and other
documents you send to the IRS and State Tax Commission. You must
also furnish your ID number to other persons or businesses who are required to
include your number on their tax returns. These
may include:
-
Companies
that pay interest, dividends, or royalties to you
-
Businesses for whom your company
performs work
-
Individuals
and companies for whom you provide dependent care services (such as day care
or elder care)
-
Certain
other amounts paid to you that total $600 or more per year, including
independent contractor payments
-
Banks - you may need an EIN to open a
business bank account
You may not be able to use your
Social Security number as your tax ID number in all situations even if you are a
sole proprietor and, for your safety, it is often better not to use it. For
instance, if you have both a personal bank account and a business account at the
same bank, you
won't be able to use the same identification number on both. See
Employer Identification Number
(EIN)
above
for
more information.
Illegal Drug Stamp Tax:
Idaho imposes an illegal drug stamp tax, taxing marijuana and other controlled
substances according to Idaho Code 63, chapter 42. Contact the
Idaho
State Tax Commission
for information.
Independent
Contractor:
A person who provides a service for a specified amount
of money for a specified result. An independent contractor is not subject to
control by the person for whom services are being provided except for the end
result. See Independent Contractor vs.
Employee
for the differences between an employee and an independent
contractor.
Inventory
Tax:
A federal tax collected on items held in inventory for future
production or sale. For information, visit
http://www.irs.gov/businesses/small/industries/article/0,,id=100355,00.html.
Idaho does not collect a state inventory tax.
I-9,
Employment Eligibility Verification:
Employers are required to
have all employees and owners of a sole proprietorship or partnership complete Form I-9 as proof of eligibility
to work in the U.S. See
Employer Issues
"Legal
Right to Work in the U.S."
for
more information.
Key Person
Insurance:
Protects against financial loss caused by the death or
disability of a key person in the business, including the owner. Also used to
fund buy/sell agreements when a business has more than one owner. Lenders and/or
investors may require this insurance to protect their financial interests in a
business. The business, not an individual, typically owns the policy, pays the premiums, and is the
beneficiary.
License Tax On Electricity
(Kilowatt Hour Tax):
A one-half mill (.0005) tax is charged per kilowatt
of electricity generated by the use of water power. There are exemptions for power
used in the generation process, power lost in transmission, and for power sold
for use in pumping irrigation water as well as manufacturing, mining, milling,
smelting, refining and processing. The tax is paid to the Idaho State Tax
Commission using
Form 48.
Local Option Sales
Tax:
Some resort cities,
auditorium districts, and counties collect a local sales tax in addition to state sales tax. To find a list of such
entities visit http://tax.idaho.gov/.
Luxury
Tax:
Luxury tax is a form of excise tax collected on the sale of certain
non-essential
consumer goods such as luxury automobiles and yachts. See IRS
Publication
510
for reporting instructions and information on taxable items.
Manufacturer's
Tax:
A form of excise tax imposed on the manufacture or import of certain items. For information
and a list of taxable items see
IRS
Publication 510,
chapter 5.
Marketing Plan:
A plan detailing how a
company’s products and/or services will be
marketed. This includes information
on target markets and how to reach them, competitor analysis, marketing and
advertising methods, anticipated marketing costs, and possible future marketing
opportunities. The marketing plan
may be included in the business plan.
Mezzanine Financing:
A loan for the
purchase or renovation of real estate. Mezzanine financing is less expensive than an equity loan
and similar to a second mortgage, a subordinated interest in a first mortgage,
or a preferred equity interest in the property. Mezzanine loans are typically
written for up to three years, but may be extended.
Mine License Tax:
Idaho law imposes a 1%
tax on the value of ores mined or extracted. The tax is paid to the Idaho State
Tax Commission using
Form
47.
National Standard Employer Identification Number:
A number
used to electronically transmit health insurance claims. The U.S. Department of Health
and Human Services recommends that businesses use their Federal Employer
Identification Number as their health insurance identification number. For
information, visit
http://aspe.hhs.gov/admnsimp/faqemp.htm.
New Hire Reporting:
Federal law requires
employers to report new employees and those returning after an absence of 12
months or more to the Idaho Department of Labor. The information is used to
locate parents who are in arrears with child support payments. For information,
visit
https://www2.labor.idaho.gov/newhire/.
Non-exempt Employee:
One who must be paid overtime after
completing 40 hours of work in a continuous 7 day period. Federal regulations
determine who is a non-exempt employee based on job duties, not job title.
Officer & Director Insurance:
Officers and
directors of a corporation may be held personally liable for their actions on
behalf of the company. This insurance protects them in the event of a lawsuit.
Some people may be unwilling to serve on a board of directors without this
coverage.
Operating Property:
The State Tax Commission is responsible for valuing
public utilities and railroads, which collectively are called "operating
property."
Perfection
of Security Interest:
Creditors may use a debtor's personal property as collateral for a loan by
taking (or perfecting) a security interest in that collateral. To form a
security interest, both parties (creditor and debtor) must create a written security agreement that specifically grants a security interest to the creditor.
The agreement
should describe the collateral being used to secure the debt and must be signed by the debtor. Once the
agreement is made, the security interest "attaches," which means that
if the debtor defaults on the loan, the creditor may repossess the collateral or foreclose
on real property to pay off the debt.
The creditor who holds a security interest in the real or personal assets of a business should
file a State of Idaho Financing Statement, Form
UCC-1, with the Idaho Secretary of State's
office. This places a lien on the assets and protects them against other
creditors and transfers by the original debtor to another party. Only banks,
dealers, or individuals who regularly grant loans can file with the Secretary of State. A lien is in effect for five years and
may be renewed. More information is available on the
Secretary of State's
Web site.
Pollution Prevention (P2): Pollution Prevention is any activity, including the use of materials,
processes, or practices, which reduces or eliminates the creation of pollutants
or waste at the source. It
includes protection of natural resources by conservation and increased
efficiency in the use of raw materials, energy, water, or other resources. For
more information, visit the Pacific Northwest Pollution Prevention Resource
Center's Web site at http://www.pprc.org.
Professional Liability Insurance:
Protects professionals (doctors, lawyers,
architects, etc.) against malpractice
suits.
Pro-forma
Financial Statements:
Financial statements
created by a business to project the anticipated financial future of a business. The
statements are
created using current data and include anticipated changes in sales, revenues,
and expenses and their affect on future net earnings. Start-up businesses
without a current financial history create pro-forma statements using estimates
of future sales and expenses.
Property
Taxes: Property taxes are paid on both real
estate and personal property owned by a business, such as equipment or
machinery, including office equipment and software. The tax is collected by your local county
assessor. For information, see the Taxes
section of
this site.
Registered Agent:
A person or business located in Idaho that acts as the legal point of
contact for a foreign corporation or LLC. Salaried Employee: Usually a supervisor, manager, or
another professional who is paid an annual salary pro-rated by pay period;
he/she is not paid an hourly
rate. Salaried employees are typically exempt
from overtime pay (see
exempt and
non-exempt
employees above).
Sales and Use Taxes:
Idaho sales and use tax is imposed on retail sales and rentals of
tangible personal property. Sales tax is also collected on admission fees, fees
for recreation, hotel/motel/campground accommodations, subscriptions, and fabricating and printing labor.
Sales tax is prepaid on coin-operated amusement devices (such as video
games) by the
owner who buys a yearly "amusement device decal" for each device.
Use tax is paid on goods that are put to use, consumed,
or stored in Idaho if sales tax was not paid on the goods at the time of
purchase. The person who
uses, consumes, or stores the goods in Idaho owes a use tax unless a sales tax
exemption applies. For example, if a restaurant buys food for resale (tax exempt),
but consumes some of it in a trade show promotion, the business owes use
tax on the cost of the food used. Use tax is also paid on internet and
mail-order purchases, including business-related magazine subscriptions, and on
charitable donations of products unless sales tax was paid at the time of purchase.
For
more information, see the
Taxes section of this site.
Self-employment
Tax:
Self-employment Tax is the Social Security and Medicare tax collected from
individuals who are self-employed. You must pay this tax if you earn $400 or
more from self-employment activities ($108.28 for church employees), including
part-time activities, even if you pay Social Security taxes through another
employer or are currently receiving Social Security. Self-employment tax is reported
annually at the time you file your personal income taxes (usually April 15)
by using IRS
Form
1040-SE.
For information, see
http://www.irs.gov/businesses/small/article/0,,id=98846,00.html.
Severance Tax:
A 2%
severance tax is imposed on the market value of oil or gas produced in Idaho. The tax
is paid to the Idaho State Tax Commission.
State
Unemployment (SUTA) Taxes:
Unemployment Insurance is paid by employers. It provides payments to workers who are unemployed through no fault of their own and
who are able to work, available for work, and who are actively seeking
work. Eligibility to receive these benefits is set by law.
Unemployment
Insurance benefits are funded through an employer tax, which is collected by the
Idaho Department of Labor and placed in a trust fund. Unemployed
workers, or workers whose hours have been reduced to less than full-time, can
apply for unemployment insurance benefits.
To
obtain more information, or to apply for unemployment insurance benefits,
contact your local Department of Labor office. To find the office
nearest you, visit
Idaho Department of Labor directory.
Also visit the
Taxes
section of this Web site.
Surety Bond:
Guarantees that a business has
the financial capacity to perform the work it has been hired to do. Very common in the
construction industry.
Tax Payer Identification Number : See Employer Identification Number
above.
1099-MISC:
Employers who use the services of independent contractors must provide this form
to those who earn $600 or more in a calendar year. The recipient will use the
form to report income when filing her/his income taxes. The form must be provided to the recipient by February 15
of the year following that in which the money was paid. A copy of the 1099-MISC is sent to the
Internal Revenue Service. 1099-MISC is also used to report certain other
transactions, such as royalty payments. For information, see
http://www.irs.gov/instructions/i1099msc/index.html
and
http://www.irs.gov/pub/irs-pdf/i1099msc.pdf.
Trade Mark:
Also called a service mark;
this is a
logo, symbol, or name used to uniquely identify a product, service or business.
Registering a trade mark prevents other businesses from using it. Trade marks can be registered at the state level with the
Secretary
of State's office or at the national level with the
U.S.
Patent and Trade Mark Office.
Companies doing business internationally can
also register their trademark. For more information visit the
Hot
Topics
section of this Web site.
Travel and Convention
Hotel/Motel Taxes:
In addition to the state sales tax, a
statewide 2% travel and convention tax is charged to the user or occupant of a hotel/motel
room or campground. The tax is collected by the hotel/motel and paid to the Idaho State Tax Commission.
Unclaimed Property:
Unclaimed
property consists of the contents of safe deposit boxes, stocks and bonds,
uncashed refund and payroll checks, utility deposits, traveler’s checks, tax
refunds, and other financial items whose
owner cannot be located. To find out if you or your
business has unclaimed property, visit
http://sto.idaho.gov/UnclaimedProperty/.
Unemployment Insurance:
This is a tax, not insurance, which is paid by the
employer. State unemployment taxes are administered by the Idaho Department of
Labor. The Internal Revenue Service administers the federal unemployment tax.
When a worker becomes unemployed, they may qualify to draw unemployment
insurance. For more information, visit the
Taxes
section of this Web site.
UPC Codes:
A bar code placed on a product, including books and
magazines, that is scanned at the time of purchase. The code identifies the
specific product, the manufacturer, and the selling price. UPC codes are ordered
by the brand owner (not retailers) from GS1 US BarCodes and eCom™ at
http://www.gs1us.org/barcodes_and_ecom/standards/gs1_identification_numbers
W-2:
By January 31, employers
must provide employees with a form W-2 showing total wages or salary earned the previous year
and the amount of taxes, Social Security and Medicare, retirement plan
contributions and other deductions
withheld. The employee files the W-2 with his/her income taxes.
W-4:
Employees must
complete a W-4 when they begin employment. The form is used to calculate federal and
state tax
withholdings.
W-9
- Request for Taxpayer
Identification Number: Businesses that
are required to file an information tax return with the IRS must obtain the
correct taxpayer identification number to report. Examples include businesses
that issue 1099s and those that must report real estate transactions,
contributions to an IRA, cancellation of debt, and other monetary transactions. See IRS
form
W-9.
Wages:
Payments made to
an employee for work performed. Employees who are paid wages (rather than a
salary) are paid an hourly rate and are paid overtime for time worked in excess
of 40 hours in seven consecutive days.
Withholdings:
The amount of money an employer
withholds from an employee's pay check for taxes, Social Security and Medicare,
health insurance and retirement plan contributions.
Workers Compensation Insurance:
Insurance carried by an employer to cover employees and
business owners in the event of an on-the-job accident or illness. Employers are
required by law to have workers comp coverage, which is administered by the
Idaho Industrial Commission. Payments cover lost wages, medical expenses, and
rehabilitation.
Zoning:
A system of land use planning
established by cities and counties that divides land into areas to be used for
residential homes, manufacturing businesses, mixed business usage, agriculture,
industrial,
and other designations. Business owners must comply with zoning regulations when
choosing a location for their business.
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