How to Start a Business: What Government Forms to Fill Out
DISCLAIMER: The information and materials we share in this article are intended for reference only. As the information is designed solely to provide guidance to the readers, it is not intended to be a substitute for someone seeking personalized professional advice based on specific factual situations. Therefore, we strongly encourage you to seek the advice of a professional to help you with your specific needs.
Starting your own business is exciting! Your creative juices are flowing with big ideas for your product, branding, and marketing. But, wait. What government forms do you need to fill out to be official? Where do you start?
We’ve got you covered with documents to complete on the accounting and tax sides of your business. In this article, we’ll walk you through the foundational business formation ideas to consider and the five basic forms that need to be on your radar:
- Articles of Organization (if you decide for your business to apply to be an LLC)
- Employer Identification Number (EIN) application
- Business Bank Account application
- Form 1040-ES to file quarterly taxes
- Form Schedule C to file annual taxes
Forms to Be Aware of While Creating Your Business
To be clear, to start a business in the U.S., you typically don’t need to complete any official documents for your business to be expected to pay taxes to the IRS quarterly each year.
Paying taxes is complicated and intimidating. Here are steps to take and documents to complete to set yourself up for success to pay your business income taxes and stay in compliance with the IRS.
Do you want to organize as an LLC?
The first step you need to take is to determine if you want to organize your business as a Limited Liability Company (LLC). This is the first step, because this determines how you approach and complete the other documents you’ll take on next.
Here is a short list of pros and cons to determine if you want to apply for your business to become an LLC. To apply to become an LLC, you’ll file what are typically called Articles of Organization with any state of your choosing.
Pros to Being an LLC
1. Being an LLC May Protect Your Personal Assets if Your Business is Sued:
Having your business as an LLC may give you some limited protection of your personal assets if your business is ever sued and owes money. Make sure to speak to a lawyer about this. The limited liability protections vary state to state.
If your business is sued there is a chance a court may choose to “pierce the corporate veil.” This means the court may waive the business’s limited liability and use your personal assets to make sure the money owed by your business is paid. You can read more on why and how courts may decide to pierce the corporate veil here.
One basic step you can take to protect yourself from a court piercing the corporate veil is to make sure to separate your personal money from business money by setting up separate bank accounts. We’ll walk through how to do this below.
2. Possible S Corporation Status in the Future:
Having your business as an LLC gives you the opportunity to elect S Corporation status when it’s tax advantageous for your business to do so. You can read more about the best time to do this in your business’ growth here.
3. Build a Professional Image:
Being an LLC and having the “LLC” after your business name may make your company look more professional to potential clients. Being an LLC may also give you an advantage in receiving work over other competitors, because some companies require all vendors they work with to be organized as an LLC in hopes to clearly establish that you are not an employee working for them but a separate vendor or contractor.
Cons to being an LLC
1. More Work:
Forming an LLC creates more work to set it up and stay in compliance each year. To stay in compliance, you typically need to file an annual report and pay an annual fee with the state you filed your LLC within each year.
2. Extra Costs:
There are extra costs for filing to be an LLC and annual fees to stay in compliance. You can see a list of each state’s estimated filing fee and annual fee here.
Form 1: Articles of Organization
If you decide you don’t want your business to be an LLC, you can skip this step and move down to the next document to complete: filing for an Employer Identification Number (EIN).
If you’ve decided for your business to become an LLC, you’ll need to file your business’s Articles of Organization application with the state of your choosing. Like we shared above, some states require a fee to apply. For example, Georgia’s is $100.
To find your state’s Articles of Organization application on their government website, search online for “State Name + Articles of Organization for LLC.”
Form 2: Employer Identification Number (EIN) Application
The next document to complete is to get an EIN from the IRS. The IRS assigns and uses EIN’s to track businesses who are required to pay taxes.
To get your business’ EIN, get started here with this tutorial.
Form 3: Business Bank Account Application
The third thing to do for your business is to get a business bank account that you solely use for business purposes to separate your business transactions from your personal transactions.
To apply for a business bank account, go to your current bank and ask to open a business bank account or do research and choose another bank to apply to.
If you’re just starting a business and have a small number of transactions, you may discount this step, but it’s important to keep your personal accounts and your business transactions separate from the very beginning. Here are a couple reasons why.
Reasons to Apply for a Business Bank Account
- Having a business bank account could protect your LLC by not allowing courts to pierce the corporate veil and go after your personal assets if your business is sued or audited and owes creditors.
- Second, having a business bank account makes record keeping much easier to track your income and expenses in order to pay your quarterly taxes and prepare your annual taxes.
Forms to Complete for Quarterly and Annual Taxes
Here are the documents you need to complete quarterly and annually each year to submit your business’ income taxes.
Form 4: Form 1040-ES to File Quarterly Taxes
The U.S. tax structure is a “pay your taxes as you go” system. As your business makes money throughout the year, you’re expected to pay your income taxes quarterly as the year progresses. Typically, the due dates for businesses to pay quarterly taxes are:
- April 15th
- June 15th
- September 15th
- January 15th (of the following year)
To make your quarterly tax payments, you can pay them online to IRS here.
Form 5: Form Schedule C to File Annual Taxes
By April 15 of each year, each business is required to file Form Schedule C. This is the tax document you’ll fill out all of your business’s income and expenses for the previous year and share with the IRS. You can view the Schedule C document here.
DISCLAIMER: The information and materials we share in this article are intended for reference only. As the information is designed solely to provide guidance to the readers, it is not intended to be a substitute for someone seeking personalized professional advice based on specific factual situations. Therefore, we strongly encourage you to seek the advice of a professional to help you with your specific needs.
Author
Adam & Lindsey Nubern
Adam Nubern -CPA and Lindsey Nubern help RVers, digital nomads, and location independent businesses with their taxes and accounting at Nuventure CPA LLC. They are digital nomads and have been traveling for over four years in the US and abroad out of backpacks, campervans, and RVs. They live the lifestyle and enjoys helping folks navigate their numbers while being on the road.
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