The following is a recommended list of items for setting up your new business.
Choose a business structure and register the business
Businesses are registered with state governments. The most common business structures are:
Sole Proprietorship - an unincorporated business owned by an individual. There is no distinction between the taxpayer and their business. This business entity does not require a separate tax return, a Schedule C, Profit or Loss from Business, is filed with your Form 1040
Partnership - an unincorporated business with ownership shared between two or more people. Generally prepares and files a partnership agreement with the appropriate state agency. Required to file a separate tax return, 1065 partnership return. Partners share of income/losses is reported on a K1. These amounts flow through to your personal return
Limited Liability Company - a business structure allowed by state statute which can be treated as a sole proprietorship if only one member or a partnership if two or more members. An LLC can also elect to be treated as a either a corporation or S corporation for tax purposes. Form 8832, Entity Classification Election, to elect status as a corporation or Form 2553, Election by a Small Business Corporation, to elect status as an S corporation is filed with the IRS.
Corporation - Also known as a C corporation. It’s a separate entity owned by shareholders. Articles of Incorporation are filed with the appropriate state agency. Required to file a separate tax return, 1120 corporate return. The corporation pays tax on all income earned, individuals are taxed on dividends received from the corporation
S Corporation - a business using any of the structures above that elects to pass corporate income, losses, deductions, and credits through to the shareholders. Form 2553, Election by a Small Business Corporation, is filed to change being taxed as an S corporation with the IRS. K1s are issued with owners share of income/losses is reported on a K1. These amounts flow through to your personal return
Apply for an Employer Identification Number (EIN)
An EIN is also called a federal tax identification number. It is issued by the IRS and used to identify a business for tax purposes. Apply for an EIN on the IRS website
Setup a business bank account
Typically requires articles of organization from the state business registration and EIN from the IRS.
Setup an accounting system
We recommend QuickBooks Online for business accounting needs. We offer services to setup and maintain your accounting system. See our accounting page for more information.
Setup payroll (if needed)
Apply for state payroll tax accounts (varies by state).
All employees should complete the following forms:
Form I-9, Employment Eligibility Verification U.S. Citizenship and Immigration Services
Form W-4 Employee’s Withholding Allowance Certificate
Verify any state forms that may also need to be completed
We offer services to setup and maintain your payroll. See our accounting page for more information.
Setup a business website
We like Wix for a professional, drag and drop, website solution.