Much of what we learn about starting a business we learn as we go. There are numerous services out there trying to charge you to get some items set up as you begin. Keep in mind that much of what you need you can do by yourself, and this will save you significantly on your start up costs. One example of this is companies offering to get you the Employer Identification Number that you need. They try to charge hundreds of dollars to get this accomplished, when you can do this yourself for free right here: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online . When I tried to gather this there were pages of ads before I could get to the actual link. The major thing you need to do before getting the EIN is to determine your business entity type or structure. Here is a brief description and several of the types:
- Sole proprietorship: An unincorporated business owned by an individual. There’s no distinction between the taxpayer and their business.
- Partnership: An unincorporated business with ownership shared between two or more members.
- Corporation: Also known as a C corporation. It’s a separate entity owned by shareholders.
- S Corporation: A corporation that elects to pass corporate income, losses, deductions and credits through to the shareholders.
- Limited Liability Company: A business structure allowed by state statute. If a single-member LLC does not elect to be treated as a corporation, the LLC is a “disregarded entity,” and the LLC’s activities should be reflected on its owner’s federal tax return as a sole proprietorship.
Once you have settled these two items taxes will be your next project. Here is some great direction for the tax compliance from the IRS: https://content.govdelivery.com/accounts/USIRS/bulletins/36e086e?reqfrom=share
