Breaking News - Federal and State Taxes
Checklist for Starting a Business
The checklist below provides the basic steps you should follow to start a business. This list should not be construed as all-inclusive. Other steps may be appropriate for your specific type of business.
Information about specific industries can be found at the Industries/Professions Web page.
Each state has additional requirements for starting and operating a business. For information regarding state-level requirements for starting a business, please refer to your state's website.
Refer also to the Small Business Administration's Steps to Starting a Business.
You will be required to obtain a new EIN if any of the following statements are true.
You will not be required to obtain a new EIN if any of the following statements are true.
A "C" Corporation is the most common corporate structure. It is also called a general corporation. A “C” corporation may have an unlimited number of shareholders. It is normally chosen by those businesses that are planning to have more than 30 shareholders or planning a large, public stock offering. These general corporations usually pay taxes at two levels. First, the corporation is required to pay taxes based on the corporation’s profits. Additionally, the owner or shareholder is taxed when the corporation distributes profits, known as dividends, to the individual. This is commonly known as “double taxation
An LLC is an entity created by state statute. The IRS did not create a new tax classification for the LLC when it was created by the states; instead IRS uses the tax entity classifications it has always had for business taxpayers: corporation, partnership, or disregarded as an entity separate from its owner, referred to as a “disregarded entity.” An LLC is always classified by the IRS as one of these types of taxable entities. If a “disregarded entity” is owned by an individual, it is treated as a sole proprietor. If the “disregarded entity” is owned any any other entity, it is treated as a branch or division of its owner.
Changes affecting Single Member LLCs with Employees
For wages paid on or after January 1, 2009, single member/single owner LLCs that have not elected to be treated as corporations may be required to change the way they report and pay federal employment taxes and wage payments and certain federal excise taxes. On Aug. 16, 2007, changes to Treasury Regulation Section 301.7701-2 were issued. The new regulations state that the LLC, not its single owner, will be responsible for filing and paying all employment taxes on wages paid on or after January 1, 2009. These regulations also state that for certain excise taxes, the LLC, not its single owner, will be responsible for liabilities imposed and actions first required or permitted in periods beginning on or after January 1, 2008.
If a single member LLC has been filing and paying employment taxes under the name and EIN of the owner, and no EIN was previously assigned to the LLC, a new EIN will be required for wages paid on or after January 1, 2009. If a single member LLC has been filing and paying excise taxes under the name and EIN of the owner and no EIN was previously assigned to the LLC, a new EIN will be required for certain excise tax liabilities imposed and actions first required or permitted in periods beginning on or after January 1, 2008. The following examples may assist in determining if a new EIN is required:
Once an EIN has been assigned to a business entity, it becomes the permanent Federal taxpayer identification number for that entity. Regardless of whether the EIN is ever used to file Federal tax returns, the EIN is never reused or reassigned to another business entity.
The IRS cannot cancel your EIN. However, if you receive an EIN but later determine you do not need the number, the IRS can close your business account. The EIN will still belong to the business entity and can be used at a later date, should the need arise.
To close your business account, send a letter that includes the complete legal name of the entity, the EIN, the business address and the reason you wish to close your account. If you have a copy of the EIN Assignment Notice that was issued when your EIN was assigned, include that when you write to us at: Internal Revenue Service Cincinnati, Ohio 45999
Permanent IRS Offices Outside the United States
U.S. Embassy Internal Revenue Service 2 Avenue Gabriel 75382 Paris Cedex 08 France
International applicants must call (267) 941-1099
Form SS4Employer ID Number EINForm SS5Social Security Number SSNForm W4Employee WithholdingForm W7Individual Tax ID Number ITINForm W9Request for Tax ID NumberForm 2553Election by Small Business S CorpForm 2848Power of AttorneyForm 1120Corporation Income Tax ReturnForm 1120 SS Corporation Income Tax ReturnForm 1023Tax Exempt StatusForm 1065LLC Income Tax ReturnForm 1065Partnership Income Tax ReturnForm 1040 Sch. CSole Proprietor Income Tax ReturnForm 8832Entity Classification ElectionForm 4868Individual ExtensionForm 7004Business ExtensionForm 1042SForeign PersonalForm 1120FForeign Corporation