If you are going to work on an internal only application, using Windows Authentication. This will work out-of-the-box and requires only that you use:
<authentication mode="Windows"/>
If you want to use Forms Authentication, you can either build your own storage and encryption mechanism, which takes some work. Or add some tables to the database that allows ASP.NET to easily provide username, password and forgotten password functionality. This is achieved by running a command prompt tool that will add the necessary tables for you:
aspnet_regsql.exe
This will start a wizard that allows you to configure the features that you want to add to SQL Server.
To just add membership tables, by logging onto SQL as your logged in account use:
aspnet_reqsql.exe -S <server> -D <database> -A m -E
Or if you want to connect as a specific user, use:
aspnet_reqsql.exe -S <server> -D <database> -A m -U <username> -P <password>
Here is a link to a tutorial on how to use Forms Authentication with SQL Server in ASP.NET 2.0. Being ASP.NET 2.0, it looks out of date but it is the same in any version of ASP.NET V2 and upwards.