Before closing a business, here are the tax actions you need to take
Posted on October 30, 2020
Closing a business is always a difficult decision to make. If you are getting ready to permanently shut your doors, the CPAs at Teipen CPA Group can help you check all the appropriate boxes and help make sure you won’t be penalized by the IRS.
At Teipen CPA Group, we work with many small businesses and self-employed taxpayers. We can provide you with the precise information you — and your business entity – need as you are getting ready to close, including
- What forms to file (state and federal)
- When and how to file them
- How to report final business revenue received
- How to report closure expenses incurred
We can also help with:
- Filing your a final business return and all related forms. The type of forms you file depend on the structure of business you ran.
- Making sure your employees get what they need, tax-wise. In addition to final compensation to employees, business owners must pay final federal tax deposits and report employment taxes.
- Finalizing taxes with contract workers. Businesses that have paid contractors at least $600 for their services (including parts and materials) during the calendar year must report those payments.
- Assessing your final tax situation. Even if your business closes well before the end of the year tax payments may still be due next filing season.
Teipen CPA Group can also help you with other important business measures you may not know you need to consider such as the cancellation of your EIN and the formal closing of all IRS business accounts. This protects you, your business, and helps protect against fraudulent activity.
How long do you need to keep your former business records? And – what should be recorded in these documents? What if you have had to declare bankruptcy or sold your business? The answer is – it depends.
Our knowledgeable CPAs can help guide you through what you need to know, what and when to file, and how to follow up. Let’s talk.