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REQUIREMENTS
OF A NEW BUSINESS
The first step in
understanding how to operate a business is to understand the rules under
which all businesses must operate. There are a number of responsibilities
that you undertake as the operator of a small business, and the following
items are meant to identify some of these issues:
Requirement to collect and remit sales tax for the State of Ohio.
Certain types of
businesses are required by law to collect and remit sales taxes in the
State of Ohio. These taxes are collected on top of what you charge a
customer to purchase a product or service. The collection of sales taxes
requires that you purchase a vendor's license from the Auditor's Office.
There are a number of different frequencies which you can choose to report
and send your sales tax monies to the state, including Semi-Annual,
Quarterly and monthly. Presently, the sales tax rate in Tuscarawas County
is 6.5%. The
initial cost of a vendor's license is $25.
If you move your business location, you are also required to end your old
license and obtain a new license.
Obtaining a Federal Employer Identification Number (Form SS-4)
Businesses are required
to obtain an Employer Identification Number (or EIN) from the IRS. This
number is used to track reporting of the business entity. The form with
which to file and obtain the number is IRS Form SS-4 (a copy of the form
is provided in the appendix to this Guide). You can call the IRS and
obtain the number over the phone after filling out the form as long as you
agree to mail the form to the IRS within 24 hours of speaking to them.
Entities other than sole proprietors must have an identification number.
Sole proprietors who pay payroll taxes or issue information returns to the
IRS must also have an employer identification number in addition to their
social security number.
Timely filing of Returns.
While the notion of
filing returns on time may seem a bit trivial, it is important to identify
what returns you need to file and by what dates. A non-inclusive list of
returns required to be filed and there due dates is included in this
Guide. A business professional can help you identify the returns which
apply to your business. Tax agencies are often mandated to impose
penalties (and interest if there is a payment due) when a return is not
timely filed. Secondarily, returns which require a payment are usually not
considered to be filed timely unless the full payment is received with the
return. Filing on time can become critical in saving money as it stops the
imposition of penalties, not to mention the costs to reconstruct the
returns in time and/or professional fees.
Setting up an accounting system & filing payroll taxes, W-2's and
1099-MISC's.
If you will be paying
payroll or if you will be paying vendors who are unincorporated, it is
imperative that you get your accounting system set up to be able to handle
the gathering of information required to report. The manner and items in
the accounting system is a matter for you to resolve with a professional.
However, payroll requires that certain taxes be deposited in different
frequencies, such as daily, monthly, quarterly or semi-annually and
annually. The reporting of payroll usually requires quarterly and/or
semi-annual returns as well as the issuance of W-2's at year-end. Payments
made for services to unincorporated vendors are also required to be
totaled and forwarded to the IRS on Form 1099-MISC.
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