Starting a new business or side gig?

We can help with the New Business Registration to keep out of the Radar of the IRS.

IRS Federal & State Registrations

Starting a new business involves several critical steps to ensure compliance with federal and state regulations. Here's an overview of key considerations:

1. Choosing the Right Business Entity:

Selecting the appropriate business structure affects taxation, liability, and operational flexibility. Common entities include:

  • Sole Proprietorship: Owned by one individual, with no legal distinction between owner and business.

  • Single-Member LLC (SMLLC): Offers limited liability protection while being taxed as a disregarded entity.

  • LLC Partnerships: Involves two or more members sharing profits, losses, and management responsibilities.

  • C Corporation: A separate legal entity subject to corporate income tax; profits may be taxed twice—at the corporate level and again as shareholder dividends.

  • S Corporation: Allows profits to pass through to shareholders' personal tax returns, avoiding double taxation.

2. Registering with the IRS:

  • Employer Identification Number (EIN): An EIN is essential for hiring employees, opening business bank accounts, and filing taxes. You can apply for an EIN through the IRS.

    IRS

  • Form 2553 - S Corporation Election: If electing S Corporation status, file Form 2553 with the IRS. Ensure all eligibility criteria are met, such as having no more than 100 shareholders and only one class of stock.

    IRS

3. State and Local Registrations:

  • Fictitious Business Name (DBA): If operating under a name different from your legal business name, file a DBA with the county recorder's office where your business is located. This process typically includes publishing the DBA name in a local newspaper for four consecutive weeks.

  • State Employer Number: If you have employees, register with the state's employment department to obtain a state employer number, enabling you to withhold state taxes and pay unemployment insurance.

4. Bookkeeping and Tax Compliance:

  • Accurate Record-Keeping: Maintain detailed financial records to monitor business performance and ensure tax compliance.

  • Managing Independent Contractors: Collect Form W-9 from each contractor to obtain their Taxpayer Identification Number (TIN). This information is necessary for issuing Form 1099-NEC for payments made to contractors.

  • Updating W-9 Forms: Ensure contractors provide updated W-9 forms if their information changes to facilitate accurate tax reporting and timely payments.

Navigating these steps can be complex. Consulting with a tax professional can provide personalized guidance tailored to your business needs.