Once you have officially obtained the necessary licenses and permits for your business, you will be responsible for notifying Uncle Sam. In many cases, you can simply contact a central tax agency, which in turn will get you started with the appropriate forms and filing requirements. Once your business is listed in their database, you may receive periodic inquiries about your business or forms that you must complete to comply with state or federal laws, or both. The main taxes you will need to be aware of include:
Estimated federal individual income taxes,
Estimated federal and state corporate income taxes,
Franchise and excise taxes,
A professional privilege tax,
An income tax on dividends and interest,
A sales and use tax, and
Get an Employer Identification Number
Unless you form a sole proprietorship, you must obtain an employer identification number (EIN), even if you do not have employees. The first registration you should make is to file Form SS-4, Application for Employer Identification Number, with the federal government. You will receive an employer identification number that you will need in many cases to complete other registrations. It is somewhat similar to your personal Social Security number, only it relates to your business.
You can obtain Form SS-4 from your local IRS office or your accountant. Once you have the form, you can apply for an EIN either by mail or by telephone. If you want an EIN immediately, call the Tele-TIN phone number for the service center for your state. If you are not in a hurry, you can apply for your EIN through the mail. Keep in mind, you will need to complete Form SS-4 at least four to five weeks before you will need your EIN. After you receive your EIN, you will need to register with the state agency that governs employees and employers.
Individual Federal Income Tax
When you are a sole proprietor, a partner, or a shareholder in an S corporation, you are considered self-employed. Since there is no employer to deduct federal income tax from your wages, you must make quarterly advance payments against your estimated federal income tax. You must report this business income even if it wasn' t actually distributed to you. File your payments along with IRS Form 1040-ES. You will then file Form 1040 at the end of the year along with Schedule C - which itemizes your business expenses for the year. Check with your accountant to make sure you know how to estimate, file, and pay correctly.