The excitement of starting your own small business can often overshadow some details that are crucial to your success. Writing a solid business plan and following through with your directives are the first steps toward this success. As you will have to pay taxes on earnings, it is important to weigh the pros and cons of the tax structure you employ for your endeavor. Saving for, and making on-time estimated tax payment,s can help you avoid late penalties and possibly the hassle of an audit in the future.
Formulate a business plan. In order to have a successful business, you must make sure that you are competitive in pricing and that you analyze the strengths and weaknesses of competitors in your local area. If you are running an online business, you will want to price competitively, but bring in sufficient revenue to sustain operations. Prepare your financial information to see how you will distribute your start up money and to what areas will need the most money allotted.
Register your business with your state's department of corporations. You can choose a corporation, which offers the most protection among the options. Choose a sole proprietorship if it is a simple business, or a LLC, which offers some of the advantages of a corporation with less of the formality. You will need to file a fictitious name application if you are using a business name other than your actual name.
Get an Employer Identification Number from the IRS. This will help you when you file your business taxes. This number will differentiate your business taxes from your personal income and is necessary with a corporation. You can choose a C corporation, in which you pay business taxes as well as taxes on personal business income or an S corporation, where you are solely taxed on personal income from the business.
Set aside quarterly payments to the IRS. You are responsible for estimating your taxes and making on-time quarterly payments. You can get a form to estimate your taxes on the IRS website. This will help you know how much to hold back from the sale of goods and services that you provide your clients.
Make your quarterly payments as designated by the IRS. For 2010, the payment dates are April 15th, June 15th, September 15th and January 15th of 2011. You can make these payments by sending in a check or using a third party payment service sanctioned by the IRS.
Pay any remaining balance when you file your corporate taxes. Corporate taxes are due on March 15th of every year and any remaining balances must be paid by this date. You can file an extension of your taxes, but that will only extend the due date for filing the paperwork, your funds will still be due March 15th.