What is the first step an employer should take upon hiring a new employee in relation to taxes?

Upon hiring a new employee, the first step an employer should take in relation to taxes is to have the employee complete a W-4 form. The W-4 form is essential for determining the correct amount of federal income tax to withhold from the employee's paycheck. This form allows the employee to provide information regarding their filing status, dependents, and additional withholding, which helps employers calculate the appropriate withholding amount accurately.

Understanding the importance of the W-4 form is crucial because accurate withholding ensures that employees do not face unexpected tax liabilities at the end of the tax year, and it helps maintain compliance with federal tax regulations. By collecting this information early in the employment process, employers can establish proper payroll practices from the start.

The options involving completing a W-2 form, calculating estimated taxes, or enrolling in a tax training program occur later in the employment process or are not specifically required prior to onboarding a new employee. The W-2 form, for example, is completed at the end of the tax year to report an employee's earnings and the taxes withheld, making it irrelevant as an initial hiring step. Calculating estimated taxes is typically concerned with self-employed individuals or for those who have additional income outside of employment, thus not applicable in