IRS Tax Tips-These tax tips can help new business owners find success

IRS Tax Tip 2019-116, August 26, 2019… Starting a business can be very rewarding. It can also be a little overwhelming. From business plans to market strategies, and even tax responsibilities…there are many things to consider. Here’s what new business owners can do to help get off to a good start. Choose a business structure. The form of business determines which income tax return a business taxpayer needs to file. The most common business structures are: Sole proprietorship: An unincorporated business owned by an individual. There’s no distinction between the taxpayer and their business. Partnership: An unincorporated business with ownership shared between two or more people . Corporation: Also known as a C corporation. It’s a separate entity owned by shareholders. S Corporation: A corporation that elects to pass corporate income, losses, deductions, and credits through to the shareholders. Limited Liability Company: A business structure allowed by state statute. Choose a tax year. A tax year is an annual accounting period for keeping records and reporting income and expenses. A new business owner must choose either: Calendar year: 12 consecutive months beginning January 1 and ending December 31. Fiscal year: 12 consecutive months ending on the last day of any month except December. Apply for an employer identification number. An EIN is also called a federal tax identification number. It’s used to identify a business. Most businesses need an EIN. Have all employees complete these forms: Form I-9, Employment Eligibility Verification (U.S. Citizenship and Immigration Services) (PDF) Form W-4, Employee’s Withholding Allowance Certificate Pay business taxes. The form of business determines what taxes must be paid and how to pay them. Taxpayers interested in starting a business can find information for some industries on the Industries/Professions Tax Centers webpage. Each state has additional requirements for starting and operating a business. Prospective business owners should visit their state’s website for info about state requirements. More information: Small Business Admiration’s 10 steps to start your business


Leave a comment

Your email address will not be published. Required fields are marked *