Are you closing your business? If you are, here are some things you’ll need to do in order to stay out of trouble with the IRS.
First, make sure you file the right tax returns for the year in which you close the business. If you have employees, you must also deposit payroll taxes.
You will need to file a different form depending on whether you are a corporation, an ‘S’ corporation, a partnership, or a sole proprietor. Talk to a tax professional to determine the correct form.
Make sure you report tips if you sell food and/or beverages. Also, you’ll need to mark “final return” in the correct space on the form.
Your employees will still need their W-2s for the year the business closed so they can file individual returns.
If you have an employer identification number (EIN), correspond by mail with the IRS to close the account. The EIN will still belong to the business, so you can use it again later. You should also make sure the business has met all its state and local tax responsibilities.
For more information, including a checklist, go to irs.gov and type the words “closing a business” in the search box.
