There are typical actions that are taken when closing a business. You must file an annual return for the year you go out of business. If you have employees, you must file the final employment tax returns, in addition to making final federal tax deposits of these taxes. Also attach a statement to your return showing the name of the person keeping the payroll records and the address where those records will be kept.
The annual tax return for a partnership, corporation, S corporation, limited liability company or trust includes check boxes near the top front page just below the entity information. For the tax year in which your business ceases to exist, check the box that indicates this tax return is a final return. If there are Schedule K-1s, repeat the same procedure on the Schedule K-1.
You will also need to file returns to report disposing of business property, reporting the exchange of like-kind property, and/or changing the form of your business. If you do not have a pre-printed envelope in which to send your taxes, refer to the Where To File page for a list of addresses. Below is a list of typical actions to take when closing a business, depending on your type of business structure:
Report your final income and expenses on Schedule C. This is the company's final tax return, you cannot defer any income or expenses to the future.
Report the sale of any business assets and equipment on Form 8594, Asset Acquisition Statement, and Form 4797, Sales of Business Property.
Check the appropriate boxes on Form 944, Employer's Annual Federal Tax Return, and Form 940, Employer's Annual Federal Unemployment Tax Return, to indicate that this is your final return. Include the day you paid final wages to any employees on Form 944.
Mail the IRS a letter requesting the suspension your company's Employer Identification Number. Include the company's name, address, the date you closed your business and the EIN. If you reopen the business, you can reinstate the same EIN at a future date.