Starting a business in the U.S.: the tax basics

01Your business's form changes how you file

What form you give your business (on your own, LLC or corporation) is a legal and money decision: make it with an attorney or an accountant. What we do explain is how each one files with the IRS, according to the IRS itself (opens in a new tab):

1. 1
   On your own (sole proprietor)

   What the business earns goes on your personal return.

2. 2
   Single-member LLC

   Unless it elects otherwise, the IRS doesn't treat it separately: it goes on the owner's return.

3. 3
   LLC with two or more members

   Unless it elects otherwise, it files as a partnership.

4. 4
   Corporation

   It files separately, with its own forms.

02Registering the business: it's done in your state

In Florida you file the Articles of Organization on Sunbiz. The state fee is $125 and every year you file the Annual Report: $138.75, between January 1 and May 1. These are state fees, not our price. We help you open it.

In other states the document, fee and report change. See your state's page.

03The EIN: your business number

The EIN (Employer Identification Number) is the number the IRS gives your business. It's used for business taxes, to hire employees and often to open the business bank account. The IRS issues it for free on its website. We help you apply.

04Taxes that may apply to you

• Income tax: federal and, depending on the state, state income tax.
• Self-employment tax, if the business is yours and you don't draw an employee paycheck.
• Sales tax, if you sell goods or services that carry it: you register with your state to collect it.
• Payroll taxes, if you hire employees.

Since nobody withholds it from a paycheck, it's paid in four estimated payments: Apr 15 · Jun 15 · Sep 15 · Jan 15. The dates, with their source.

05The numbers, from day one

Open a bank account just for the business, keep your receipts and write down what comes in and goes out every month. That way, in April, the expenses the law allows are ready and none get lost. The IRS generally asks you to keep the records of a return for 3 years.