Starting a Business

Most businesses start out small. The checklist below provides the basic steps you should follow to start a business. The list should not be construed as all-inclusive. Other steps may be appropriate for your specific type of business. Refer also to the Small Business Administration's Checklist for Starting a Business.

• Apply for an Employer Identification Number (EIN) if applicable. Apply for an EIN online and receive your EIN immediately from the IRS.
  
• Select a business structure. The most common forms of business are the sole proprietorship, partnership, corporation, and S corporation. A Limited Liability Company (LLC) is a relatively new business structure allowed by state statute. Legal and tax considerations enter into selecting a business structure.
  
• Choose a tax year. A "tax year" is an annual accounting period for keeping records and reporting income and expenses. An annual accounting period does not include a short tax year. The tax years you can use are calendar year and fiscal year.
  
• Choose your accounting method. The most commonly used accounting methods are the cash method and an accrual method.
  
• If you have employees have them fill out Form I-9 and Form W-4. If your employees qualify for and want to receive advanced earned income credit payments, they must give you a completed Form W-5.
  
• Pay your business taxes. The form of business you operate determines what taxes you must pay and how you pay them. Four general types of business taxes are: income tax, self-employment tax, employment taxes, and excise tax.