Did you start or acquire a new business this year? If so, you might feel a little overwhelmed with the new responsibilities you have taken on. You may also feel a little intimidated interacting with the IRS but it is crucial you understand the resources the agency can provide.
If you haven’t already, we recommend getting a tax ID number for your new business. This is called an Employer Identification Number or EIN. You can apply for this directly through the IRS online. While sole proprietors and independent contractors have the option to use their SSN and are usually not required to have an EIN, we recommend every business obtain an EIN to avoid becoming a victim of identity theft.
Your Tax Responsibilities:
• File your business’s annual income tax return
• Pay estimated taxes for you if you own a pass-through entity or for your C Corporation
• Payroll Tax Activities: withholding, depositing payments, and filing employer tax returns
• Submitting information returns if you have independent contractors, maintain a qualified retirement plan, or offer other benefit programs to your staff.
You can (and sometimes must) handle certain tax responsibilities electronically. Here are some ways you can facilitate online activities utilizing government provided resources. Remember, not everything listed below may apply to you. Please consult your accountant if you have any questions.
• If you have a payroll or make estimated tax payments, you can schedule your tax deposits in advance by using EFTPS.gov.
Transmit W-2s to the Social Security Administration
• Submit copies of employees’ W-2s along with an IRS transmittal form (From W-3) to the Social Security Administration through the Business Services Online. This suite of services allows organizations, businesses, individuals, employers, attorneys, non-attorneys representing Social Security claimants, and third-parties to exchange information with Social Security securely over the internet. You must register and create your own password to access Business Services Online.
Remit Information Returns to the IRS
• You may have to file annual information returns to inform the IRS about your payments to independent contractors you utilize. This can be done through the Filing Independent Returns Electronically (FIRE) System.
Filing Annual Retirement Plan Returns
• If you want or need to file electronically a form in the 5500 series, you must do this through the Department of Labor’s EFAST2. EFAST2 is an all-electronic system designed by the Department of Labor, Internal Revenue Service, and Pension Benefit Guaranty Corporation to simplify and expedite the submission, receipt, and processing of the Form 5500 and Form 5500-SF. These forms must be electronically filed each year by employee benefit plans to satisfy annual reporting requirements under the Employee Retirement Income Security Act (ERISA) and the Internal Revenue Code.
As long as you are a business owner, interacting with the IRS will be required. Start to explore and learn more about the resources available to you so you can worry less about your responsibilities and required tasks.
Our team is here to support you throughout every stage of your business’s lifecycle. If you need assistance with any of the required tasks above, our professionals can help. Click here to contact us today!