The decision to close a business's doors for good is never an easy one. However, it's important to keep abreast of compliance requirements before you say goodbye. That's why you should take time to visit the closing a business page of IRS.gov. It's designed to help you navigate the process of shutting down.
It includes guidance on:
Closing even a simple sole proprietorship requires a fair amount of paperwork. For example, you may have to file the following:
There will likely be additional requirements for partnerships and corporations.
Other steps when closing a business
Taking care of employees
These tasks are among the most important. If you have one or more employees, you must pay them any final wages and compensation owed. You must also make final federal tax deposits and report employment taxes.
The following forms are mandatory:
You must also provide a Form W-2, Wage and Tax Statement, to each of your employees for the calendar year in which you pay them their final wages. If your employees receive tips, you must file Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips, to report final tip income and allocated tips.
This is just a summary. Be sure to work closely with a qualified tax professional to make sure you are meeting all the requirements.
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