Taking the Small Business Plunge | Day 5

Sunday, October 5, 2014

Paying taxes as a small business can seem kind of intimidating. Like I mentioned yesterday, if you are registered as an LLC or Sole Proprietor, your business taxes are one in the same as your personal income tax with the addition of paying an estimated quarterly tax. Paying the quarterly tax will prevent you from experiencing sticker shock at the end of the year when it’s time to fork over all of it. Your accountant has tons of answers about what system is the best for you and your business.

Now for EINs . An EIN (Employee Identification Number) is something you will need to apply for no matter what kind of business you have. This is also known as your Tax ID number. You’ll use it a lot for opening bank accounts, filling out legal forms, and paying taxes. You can apply for one on the IRS website here.

Since I had no idea how to do any of this last year, I walked into my bank and asked the business banker how to make this all kosher. He walked me through registering as an LLC and getting an EIN number. It took about a half hour and I was so thankful to have someone to walk through the steps with me. Don’t be afraid to ask a personal banker or accountant to do the same!

So that’s about it for all the legality mumbo jumbo. If there’s any glaring areas you are still wondering about, I’d love to hear!

Oh, one more thing…keep ALL  your paperwork! In fact, start a pretty binder or something with labels and the like. This running a business thing doesn’t have to be aaaaaall business. Polkadots and sparkly organizational tools welcome.

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