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Starting a Business? 3 Things You Need To Know About Taxes

Avoid IRS hassles by starting off on the right foot.

You start your own business because you found you have something valuable to give the world and you’re good at it. But like most entrepreneurs starting out, you learn there’s a bunch of red tape that has to be handled in order for you to get to the business you set out to start. Following these tips will get you on your way:

  1. Determine Your Business Type
    The most typical business types are sole proprietorship, partnership, corporation, S corporation and Limited Liability Company (LLC). You can find out more about what’s right for you here at the Small Business Administration site.
  2. Determine Kind of Taxes You’ll Be Responsible For
    There are generally 4 kinds of taxes businesses pay and depending on what your business is, one of these may be right for you: income tax, self-employment tax, employment tax and excise tax. Learn more about these taxes on the IRS website.
  3. Get an EIN
    Your business type may require you to have an EIN (Employee Identification Number). One reason for this number is this is the number your employees would use on the W-2 to do file their taxes. You can determine your need for an EIN here.

Businesses are also required to estimate and pay taxes on a quarterly basis. It’s critical you have sound bookkeeping so you can accurately stay up to date with the IRS and avoid headaches. If you’re not sure about your tax situation or your bookkeeping, when can get you on the right path. Give us a call today!

Do you have the support you need to manage your small business bookkeeping? Contact us to schedule an appointment to speak with a local small business advisor.