starting a new business

Starting a Business? 3 Things You Must Know

Starting a new business is a very exciting and busy time. There is so much to be done and so little time to do it in. If you expect to have employees, there are a variety of federal and state forms and applications that will need to be completed to get your business up and running. That’s where we can help.

Employee Identification Number (EIN)
Securing an Employee Identification Number (also known as a Federal Tax Identification Number) is the first thing that needs to be done since many other forms require it. The fastest way to apply for an EIN is online through the IRS website or by telephone. Applying by fax and mail generally takes one to two weeks. Note that effective May 21, 2012 you can only apply for one EIN per day. The previous limit was 5.

State Withholding, Unemployment, and Sales Tax
Once you have your EIN, you need to fill out forms to establish an account with the State for payroll tax withholding, Unemployment Insurance Registration, and sales tax collections (if applicable).

Payroll Record Keeping
Payroll reporting and record keeping can be very time consuming and costly, especially if it isn’t not handled correctly. Also keep in mind, that almost all employers are required to transmit federal payroll tax deposits electronically. Personnel files should be kept for each employee and include an employee’s employment application as well as the following:

Form W-4 is completed by the employee and used to calculate their federal income tax withholding. this form also includes necessary information such as address and social security number.

Form I-9 must be completed by you, the employer, to verify that employees are legally permitted to work in the U.S.

If you need help setting up the paperwork for your business, give us a call. Letting our experts handle this part of your business will allow you to concentrate on running your business.

Basic Hints to Help New Small Businesses

Folks starting a small business are often challenged by their new tax filing requirements. It can be overwhelming to learn about federal tax responsibilities.

The following is a list of basic tips to avoid potential problems:

  • Classify workers properly as employees or independent contractors as determined by law, not the choice of the worker or business owner.
  • Deposit federal employment taxes, called trust fund taxes, according to the appropriate schedule.
  • Start making estimated quarterly payments to cover your own income tax and Social Security self-employment tax liability.
  • Keep good records to protect your personal and financial investment and to make tax filing easier.
  • Consider a tax professional to help you with Schedule C.
  • File and pay your taxes electronically. It’s fast, easy, and secure.
  • Protect financial and tax records to ensure business continuity in the event of a disaster.

Starting a new business? Give us a call today. As always, we’re here to help sort out your tax responsibilities.

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