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How to Close Business with The IRS

Closing a business is always a difficult choice regardless of the circumstances. Considering this, the IRS redesigned the closing of a business page of IRS.gov to help business proprietors navigate the federal tax steps when closing a business.

The closing of a business includes many related things, not just closing the door. It’s has a lot of the process to withdraw from the business, including the forms to be filled out, and how to handle any additional payments received or spent.

Closing a business is always a difficult decision no of the circumstances. With this in mind, the IRS redesigned the closing of a business page of IRS.gov to help business owners navigate the federal tax steps when closing a business. proprietors

Closing a business includes many related things, not just closing the door. It’s has a lot of work for the process to withdraw from the business, including the forms to be filled out, and how to handle any additional payments received or spent.

Small businesses and self-employed taxpayers need to find information related to:

  • Report sales for the last year of business

  • Cost of business before closing


Here are the steps that the IRS has required all business owners to complete before announcing the shutdown.

  1. File a final tax return and related forms. For businesses, this depends on the type of business and size, the filing form as well as the related form are also different.

  2. Take care of the employees.

  3. Business owners need to pay the final federal tax deposits and report employment taxes if there is any compensation...

  4. Pay taxes owed. Even if the business closes now, tax payments may be due next filing season.

  5. Report payments to contract workers. Businesses that pay contractors at least $ 600 for services including parts and materials during the calendar year in which they go out of business, must report those payments.

  6. Cancel EIN and close the IRS business account. Business owners should notify the IRS so they can close the IRS business account.

  7. Keep business records. How long a business needs to keep records depends on what's recorded in each document.

Resource: The Internal Revenue Service - IRS

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If you, as a business owner, see that you cannot handle tax issues on your own, consider hiring our tax services to help you with it.

If you have any questions, contact us via (949) 356-0840 or irvinetaxsolutions@gmail.com

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