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This article is posted with permission from our partner IRS and originally appeared on the IRS blog at: https://www.irs.gov/newsroom/aspiring-entrepreneurs-learn-the-basics-of-setting-up-a-business Subscribe to IRS tax tips here. New entrepreneurs can start out on the right foot by making sure they understand the tax responsibilities of running a business. The process can seem daunting, but IRS.gov has resources to help new business owners. Here are a few things new entrepreneurs need to do when starting their business. Choose a business structureThe form of business determines which income tax return a business taxpayer needs to file. The most common business structures are:
Choose a tax yearA tax year is an annual accounting period for keeping records and reporting income and expenses. A new business owner must choose either:
Apply for an employer identification numberAn EIN is also called a federal tax identification number. It's used to identify a business. Most businesses need one of these numbers. It's important for a business with an EIN to keep the business mailing address, location and responsible party up to date. IRS regulations require EIN holders to report changes in the responsible party within 60 days. They do this by completing Form 8822-B, Change of Address or Responsible Party and mailing it to the address on the form. Have all employees complete these formsPay business taxesThe form of business determines what taxes must be paid and how to pay them. Visit state's websiteProspective business owners should visit their state's website for info about state requirements. via Freelancers Union Blog https://blog.freelancersunion.org/2022/09/14/aspiring-entrepreneurs-learn-the-basics-of-setting-up-a-business/
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AuthorI have 5+ years experience working as a medical transcriptionist. When I am not working, I enjoy sports like playing basketball or judo. I love making friends and connections. Archives
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