It's as easy as 1, 2, 3.
We’ve outlined the basics of registering your business because we know that starting your own business is thrilling, but it’s also a heck of a lot of work and also slightly terrifying. You are taking action and fulfilling your dreams. It doesn’t get much more exciting than that! The last thing you need in the middle of that happy bubble is a big sharp needle to burst it, which is why you need to do it the right way the first time. You need to cross your t’s and dot your i’s to make sure your business is legal and when all of that money starts coming your way, you get to keep it.
We know it can be daunting, but it’s actually way easier than you have been dreading. We’re here to help you understand the steps to registering your business so you can get started and put that sweet sweet revenue back into your business, toward your mortgage or to booking that dream vacation to Fiji.
Register your business with your state
The first step is registering your business with your state. Before registering, you will need to know what type of entity you are registering your business as (LLC, Sole Proprietorship, etc.). Each state has a different set of forms and regulations, so start on your state’s website to access information about registering in your state.
Register your business with the IRS
After you have registered your business with your state, you will be able to start your business. At the end of the year you will need to complete your Schedule C along with your 1040 personal tax return. The first year you file your Schedule C, you will need to indicate that this is the initial return by checking the required box, which let’s the IRS know that this is your first year as a new business. It’s as easy as that!
Get a Tax ID / EIN
If you have employees or your business is a corporation or partnership it is required that you obtain a Tax ID Number, also known as an Employer Identification Number (EIN). Sole proprietorships and single member LLCs are not required to have an EIN, but can apply for one. If you do not have an EIN as a sole proprietor or single member LLC, you will have to use your personal social security number in place of one. We prefer to use an EIN, as some wholesale distributors or other business relationships and applications may require it, plus it keeps your personal social security number more secure. You may also want to consider future growth, as it will be required if you plan to add employees in the future.
It’s free and simple to get an EIN by filling out the IRS form to answer a few questions about your business.
That’s it! It’s official. You’re a business owner! Congratulations!
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