Many people going out of business have no idea what to do. There are very simple steps to take if you have had the unfortunate measures of having to go out of business.
Many people believe it or not feel they have to file bankruptcy but the reality is you just need to close the door and notify those people that you have responsibility to.
The following are the tax steps you have to take if you are going out of business.
Small businesses and self-employed taxpayers will find a variety of information on the page including:
Follow these steps:
• File a final tax return and related forms. The type of return to file and related forms depends on the type of business.
• Take care of employees. Business owners with one or more employees must pay any final wages or compensation, make final federal tax deposits and report employment taxes.
• Pay taxes owed. Even if the business closes now, tax payments may be due next filing season.
• Report payments to contract workers. Businesses that pay contractors at least $600 for services including parts and materials during the calendar year in which they go out of business, must report those payments.
• Cancel EIN and close IRS business account. Business owners should notify the IRS so they can to close the IRS business account.
• Keep business records. How long a business needs to keep records depends on what’s recorded in each document.
If you have any questions please feel free to call us for a free consultation.
