What are the paper work requirements through the federal to start a new business?
I know for sole prorietorship have to fill out FTB Form 540 and Irs form 1040. A corp FTB 100 adn IRS 1120. I don't need anything on sale & use, property tax or special tax. Anything thing that I'm missing?
Public Comments
- Yes, you are missing a LOT!! First,understand that creating an entity (Partnership, LLC or Corp) is easy to do, but hard to undo. So, the first question is, why do you think you need to be any type of entity other than a sole prop (ie You are the business)?? Liability reasons-- insurance is cheaper & better at first; tax reasons-- until your profit is significant (say > $50K) it will cost more to be an entity than you will save in tax-- CA hits most entities with a minimum franchise tax of $800/year; business continuity after death-- will there be anything ongoing if you die? Very likely, if it's just you a sole prop may be best for now. If that's the way to go and you have no employees, you do not need any add'l ID numbers. Be sure however that you have appropriate licenses for your location and activity. CA Counties can determine if you should have a biz license if you include business income on your Sch C(1040), the form wher you calc Profit & loss for the business. The bus. activity code shows on page 1 of 540. You also might find that you are subject to a tax on personal property used in the business. Now, if you have your heart set on incorporating, you do that with the Secretary of state go to www.ss.ca.gov. Next, you''' need to get a Federal tax I.D. number EIN). go to www.irs.gov fill out form SS-4. To avoid double taxation you may want to elect to be an S-corp. Make the election using form 2553. Good Luck! Hank Roitman, EA Sacramento, CA
