TAX CHECKLIST FOR CLOSING A BUSINESS

TAX CHECKLIST FOR CLOSING A BUSINESS

 

There are certain actions that businesses typically take when closing. A business ending its operations must file an annual return for the year it goes out of business. It must file the final employment tax returns for any employees. A business must also make final federal tax deposits of these taxes. At the termination of operations, it is also necessary to attach a statement to a return indicating the name of the person in charge of payroll recordkeeping and the address where these records are kept.

Any annual tax return form for a partnership, corporation, S corporation, limited liability company, or trust includes checkboxes near the top front page just below the information describing the business entity. The box that indicates this tax return is a final return must be checked. This also needs to be done on any Schedule K-1s.

Returns must also be filed to report disposing of business property, reporting the exchange of like-kind property, and/or changing the form of the business. The following are some typical actions required when closing a business, depending on the type of business structure:

  • Make final federal tax deposits;
  • Issue final wage and withholding information to employees;
  • File final quarterly or annual employment tax forms;
  • File final employee pension/benefit plan;
  • Report information from any W-2s issued;
  • Report information from any 1099s issued.
  • Report capital gains or losses;
  • Report partner’s/shareholder’s shares;
  • File final tip income and allocated tips information return;
  • Issue payment information to sub-contractors;
  • Consider allowing S corporation election to terminate;
  • Report corporate dissolution or liquidation;
  • Report business asset sales; and
  • Report the sale or exchange of property used in a trade or business.

If you need any assistance closing a business, contact a tax attorney at the Gartzman Law Firm at (770) 939-7710. Try our easy-to-use contact form and arrange a free consultation today.

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