Planning on Starting a Business? Here Are Some Tax Tips You Need to Know

Whether you own your own company or want to start making some side income off a hobby, there are some important tax considerations to know:

• The form of business determines what kind of tax return you will need to file.
• The most common business structures are: sole proprietorship, partnership, corporation, S corporation, and Limited Liability Company (LLC).
• Choose a tax year for your annual accounting period. Your tax year can be either 12 consecutive months starting January 1 and ending December 21 or 12 consecutive months ending on the last day of any month except December.
• Apply for an Employer Identification Number used to identify your business.

* This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov⁷

Footnotes

7. ^{IRS.gov, September 13, 2021}