Conducting business as a sole proprietor is one of the simplest forms of operation. It’s easy to start a business operated as a sole proprietorship and just as easy to discontinue one.
When starting a business with the intent to hire employees, the important first step is to obtain an employer Identification Number (EIN). This is done by filing form SS-4 (application for employer identification number). Employees must fill out a W-4 and I-9 form as well as provide a social security number. It is important to open a separate checking account for the business. Startup expenses for a business are treated differently than regular expenses, so they must be tracked separately. Self-employed taxpayers may claim a deduction for home-based business expenses. When purchasing equipment it is important to track cost and date of purchase accurately. As the only owner of the business it is required that quarterly estimated tax payments are made under certain circumstances.
Learn more about the areas of deductible expenses and how to begin the tax process as self-employed. Contact us today!