IRS Launches Redesigned Page to Help Owners Navigate Tax Steps When Closing Business01 October 2020
The IRS has launched a redesigned page on its official website to help business owners navigate the federal tax steps when closing a business. The Service has streamlined the “Closing a Business” page into simple steps, so business owners and self-employed individuals can quickly find the information they need. “Closing a business is a difficult decision and we want to help ease the burden for people making this tough choice. We redesigned the closing a business page on IRS.gov to help businesses comply with final tax responsibilities,” Eric Hylton, Commissioner, Small Business/Self-Employed Division said.
The following information is available on the page:
- File a Final Return and Related Forms: The page features a section for each business type and business owners can click on the section that applies to them to get the returns and forms they need.
- Take Care of Employees: Business owners with one or more employees must make final federal tax deposits and report employment taxes.
- Pay the Taxes Owed: Even if the business closes now, tax payments may be due next filing season.
- Report Payments to Contract Workers: Businesses that pay contractors at least USD 600 for services (including parts and materials) during the calendar year in which they go out of business, must report those payments.
- Cancel EIN and Close IRS Business Account: The IRS cannot close out an account until the business has filed all necessary returns and paid all taxes owed.
- Keep Business Records: How long a business needs to keep records depends on what’s recorded in each document.
In addition, the page also has information to help business owners who are declaring bankruptcy, selling their business and terminating retirement plans. For easy access, taxpayers can reach the page at IRS.gov/closingabiz.