Starting a Business in the U.S.

If you are starting a business in the U.S., you want to have the IRS Publication 583 Starting a Business and Keeping Records as your reference guide. You may also want to sign up to receive IRS Tax Tips.

Issue 2010-05 has 6 tax tips for the new business owner.

  1. Business Structure - Decide what your business entity will be; the most common are:

    • Sole Proprietorship
    • Partnership
    • Corporation
    • S Corporation

  2. Accounting Method - Select your accounting method ... cash basis or accrual basis.

  3. Taxpayer Identification Numbers - Apply to the IRS using Form W-9 for an Employer Identification Number (EIN) ... and obtain a Social Security Number (SSN) from every employee you pay and the EIN for every partnership or corporation you pay.
    • You will need to withhold partial payment if the employee does not provide you with an SSN.

  4. Tax Year - Report your taxable income to the IRS annually according your accounting period selected ... which is calendar or fiscal.

  5. Taxes - The type of business taxes you pay ... and how you pay them are based on the type of business you operate:

  6. Recordkeeping - Keep adequate business records to audit proof your tax return.

Publication 583 has detailed information on each tip mentioned above.

Resources used: IRS Tax Tip 2010-05 and IRS Publication 583

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