So you’ve finally decided to take that big leap of faith and start your own business…congratulations! Now you have to figure out what all needs to be done to get your business up and running from a tax and accounting standpoint.
First, you have to decide how your business will be set up legally and with the IRS. You have the options to incorporate or be an LLC, in both instances it is a good idea to have an attorney do the paperwork for you. From a tax standpoint, if you are a single member LLC you can be taxed as a Sole Proprietor (Schedule C on 1040) or make an S-election with the IRS and file and S-corp tax return (112oS). If you have multiple members, you will most likely be filing a Partnership tax return (1065). You definitely should discuss this with an accountant as there are a lot of options.
The other thing that you should focus on getting started right away is how you’ll be keeping track of your bookkeeping. It’s important to have a good system up and running from the start. In most cases I recommend QuickBooks to my clients. It is the most user-friendly for small business owners.
There are some other things that you might have to get setup too, for example payroll. You should seek out professional help to make sure you are filing everything correctly and on time.