IRS Forms For New Business Owners
Congratulations on starting a new business! It’s an exciting time of building, and growing, and watching your vision come to life. But it’s important that you don’t get too lost in the clouds at the beginning because there are some very important things that the IRS insists that you do as a new business owner. Here are some of the forms you should be aware of.
Employee Identification Number
Your employee identification number (or EIN) is a unique set of 9 digits, like a social security number, used to identify your business to the IRS. The application for your own EIN is relatively uncomplicated, but this is a task that should come first on your list of to-do’s. Your EIN will be provided to you free of charge and should come to you immediately if you apply online.
After you have gotten your EIN you’ll need to choose which way you’d like to structure your business. Whether you choose to be a sole proprietorship, an LLC, or a corporation will impact the other IRS forms you need and how you fill out those forms. So before moving forward, if you haven’t already, make a decision about what kind of business you are to become. If you’re having trouble making this decision, we can help!
Depending on what kind of business you’ve set up, you’ll need to fill out a specific IRS form to declare your profits and losses to the U.S. government. If you are a sole proprietorship you’ll fill out the Form 1040 Schedule C, if you are a corporation you fill out the Form 1120, or if you are an S Corporation you will fill out the Form 1120-S. There are also different forms for those businesses that operate as farms, those who operate out of their homes, and more. If all of this seems just a little bit confusing, you’re not alone. We often find that our clients who come in needing the most help got themselves into trouble by trying to manage their business taxes without the help of an accountant.
I9 and W-4
Once your business is set up and you’re ready to hire your first employee there are two additional forms that you need to be aware of. The I9, which identifies your new employee as legally having the right to work in the United States, and the W-4 is a form that tracks how much money was paid to an employee and how much of that was withheld in taxes. If you’ve ever worked for someone else's company you’ve definitely filled out both of these forms, and any person working for your company should too.
Thousands of people around the country start new businesses every year. So, while these forms feel confusing and overwhelming they are most certainly not impossible. If the tax reality of building your own business is harder than you’d hoped it would be, give us a call and we’ll happily walk you through the steps. We can also help clean up a tax mess, but you’ll be much happier if you never make it to that point. For more information about working with Fix-It Accounting, contact us today.