5 Must Know Things if Starting a Business
+ What's the Best Type of Pension Plan? +
How to Safeguard Your Tax Records
a new business is an exciting, but busy time with so much to
be done and so little time to do it in.
And, if you expect to have employees, there are a variety of
federal and state forms and applications that will need to be
completed to get your business up and running. That's where a
tax professional can help.
Employer Identification Number (EIN)
Securing an Employer Identification Number (also known as a
Federal Tax Identification Number) is the first thing that
needs to be done, since many other forms require it. EINs are
issued by the IRS to employers, sole proprietors,
corporations, partnerships, nonprofit associations, trusts,
estates, government agencies, certain individuals, and other
business entities for tax filing and reporting purposes.
The fastest way to apply for an EIN is online through the IRS
website or by telephone. Applying by fax and mail generally
takes one to two weeks. Please note that as of May 21, 2012
you can only apply for one EIN per day. The previous limit was
State Withholding, Unemployment, and
Once you have your EIN, you need to fill out forms to
establish an account with the State for payroll tax
withholding, Unemployment Insurance Registration, and sales
tax collections (if applicable).
Payroll Record Keeping
Payroll reporting and record keeping can be very
time-consuming and costly, especially if it isn't handled
correctly. Also, keep in mind, that almost all employers are
required to transmit federal payroll tax deposits
electronically. Personnel files should be kept for each
employee and include an employee's employment application as
well as the following:
Form W-4 is completed by
the employee and used to calculate their federal income tax
withholding. This form also includes necessary information
such as address and social security number.
Form I-9 must be completed
by you, the employer, to verify that employees are legally
permitted to work in the U.S.
If you need help setting up or completing any tax-related
paperwork needed for your business, don't hesitate to call the
office at 301-657-8080.
Taxpayers to Safeguard their Tax Records as the Beginning of
Hurricane Season Approaches
– Hurricane season has begun and the Internal Revenue Service
advises individuals and businesses to safeguard their records
against natural disasters by taking a few simple steps.
Create an Electronic Additional Set
Taxpayers should keep a duplicate set of records including
bank statements, tax returns, identifications and insurance
policies in a safe place such as a waterproof container, and
away from the original set.
Keeping an additional set of records is easier now that many
financial institutions provide statements and documents
electronically, and much financial information is available on
the Internet. Even if the original records are only provided
on paper, these can be scanned into an electronic format. This
way, taxpayers can save them to the cloud, download them to a
storage device such as an external hard drive or USB flash
drive, or burn them to a CD or DVD.
Another step a taxpayer can take to prepare for a disaster is
to photograph or videotape the contents of his or her home,
especially items of higher value. The IRS has a disaster loss
workbook, Publication 584, which can help taxpayers compile a
room-by-room list of belongings.
A photographic record can help an individual prove the fair
market value of items for insurance and casualty loss claims.
Ideally, photos should be stored with a friend or family
member who lives outside the area.
Update Emergency Plans
Emergency plans should be reviewed annually. Personal and
business situations change over time as do preparedness needs.
When employers hire new employees or when a company or
organization changes functions, plans should be updated
accordingly and employees should be informed of the changes.
Make your plans ahead of time and practice them.
Check on Fiduciary Bonds
Employers who use payroll service providers should ask the
provider if it has a fiduciary bond in place. The bond could
protect the employer in the event of default by the payroll
IRS Ready to Help
If disaster strikes, an affected taxpayer can call
1-866-562-5227 to speak with an IRS specialist trained to
handle disaster-related issues.
Back copies of previously-filed tax returns and all
attachments, including Forms W-2, can be requested by filing
Form 4506, Request for Copy of Tax Return. Alternatively,
transcripts showing most line items on these returns can be
ordered by calling 1-800-908-9946 or by using Form 4506T-EZ,
Short Form Request for Individual Tax Return Transcript or
Form 4506-T, Request for Transcript of Tax Return.
Financial Services at Sullivan & Company, CPAs
Sullivan leads our Financial Services Division and is here to
help you navigate your financial future. As an Investment
Advisor Representative, he is able to provide an
independent opinion on the investments you already own or
are considering buying.
We can structure a portfolio
based on your risk tolerance or we can help you decide how
to invest in your company 401(k) plan. We work with each
client to identify their concerns and to provide solutions
according to their situation.
is also experienced in company retirement plans. If you own
a business that does not have a plan; we can discuss your
options and set up a plan that fits your company.
If your business already has a
plan; we offer a free evaluation of the plan to ensure that
it is up to date and working well for you and your
Our goal is to provide personal, unbiased and independent
advice to help you make well-informed decisions about your
financial life and investments.
Contact Paul Sullivan or Jordana Para to set up a free initial
consultation (301) 657-8080.
And as always if you have any questions about accounting or
investments and how they effect you or your business, please give
us a call. We
can help guide you in the right direction.
Remember you can call our offices if you have any
questions about these or any other accounting, tax,
financial planning or insurance related issues, at
Regards, Paul Sullivan, CPA
President, Sullivan & Company