In the RingCentral small business blog post “How to Launch Your Business in a Day or Less,” Mr. McCarthy talked about how easy it is to get some of the necessary resources you will need to start a business.
He talked about creating a Facebook page as an alternative to having your own website, getting a logo designed in less than a week, getting free business cards, naming your business, and of course, getting your RingCentral phone system. By taking advantage of the Internet, the resources that used to take some time to get can now be obtained in a couple of hours.
However, these are just the resources you need to run a business. Before you actually do business, you have to make sure that your company is compliant with government requirements.
So to help you, here’s a simple checklist that will help your business start off on the right path according to the requirements of the IRS:
Get an Employer Identification Number if Necessary
The Employment Identification Number or EIN is used by the federal government to identify business entities. This is the business equivalent of your Social Security number.
The businesses that need to get an EIN are:
- Businesses with employees
- Corporations and partnerships
- Businesses that file tax returns like employment, excise, alcohol, tobacco and firearms
- Businesses that withhold income paid to a non-resident alien
- Businesses with Keogh plan, which are retirement plans for self-employed individuals and small businesses.
- Businesses involved with organizations non-profit organizations, farmer’s cooperative, plan administrators, real estate mortgage conduits, estates, and trusts and IRAs.
Select a business structure and file it
You also have to select the type of business structure that is apt for your business as it will determine the type of income tax returns you have to file.
The types of business structures are:
- Sole proprietorship
- Partnership
- Corporation or C-Corporation
- S-Corporation
- Limited Liability Company (LLC)
Requirements for each type of business structure are usually filed at the office of the Secretary of State.
Choose a tax year
A tax year refers to the accounting period for keeping records and reporting your income and expenses. You can either choose a calendar year, 12 straight months that begins January 1 and ends on December 31, or you can choose a fiscal year, 12 straight months that ends on the last day of any month except December.
Have employees fill out necessary forms
According to the IRS website, there are two forms that your employees need to fill out:
Form I-9 – This is used to verify that the employee is authorized to work in the United States of America.
Form W-4 – This is used so that you can withhold the correct income from the employee’s salary or wage.
Pay the necessary taxes
The types of taxes that you would have to pay will depend on the type of business you will be running. But generally, these are the 4 types of business taxes:
- Income tax
- Self-employment tax
- Employment taxes
- Excise tax
These are the common requirements that you need to meet before you can run your business. If possible, seek legal advice to avoid confusion and to get expert opinion.
Author’s Bio:
Henry Conrad is a 29-year-old game developer from Albuquerque, New Mexico. Aside from gaming and being a tech junky, he also dabbles in creative writing, which allows him to create great storylines and backgrounds for his characters. Follow me on Twitter and join me in Google +