• Correctly classify your business. Decide on the appropriate business entity (sole proprietorship, partnership, corporation, S corporation or LLC) to determine tax filing requirements and legal considerations.
• Get your employer identification number (EIN). An EIN, also known as a federal tax identification number, is used to identify a business entity. Generally, businesses need an EIN. You may apply for an EIN in various ways, and now you may apply online. This is a free service offered by the Internal Revenue Service, and you can get your EIN immediately. You must check with your state to make sure you need a state number or charter. If you lost or misplaced your EIN, follow these steps.
• Keep adequate records. Good records will help you monitor the progress of your business, prepare your financial statements, identify sources of income, keep track of deductible expenses, keep track of your basis in property, prepare your tax returns and support items reported on your tax returns. Choose a recordkeeping system that clearly shows income and expenses.
• Hire the right tax professional. Choosing the right tax professional is essential for small business owners to ensure accurate and timely tax preparation. By asking the right questions and verifying credentials, businesses can avoid potential scams and protect their financial interests.
• Resolve debt and prevent new liabilities. If you owe a tax debt and can’t pay all or part of it, the IRS can help. You have options to resolve your tax bill.
  • Pay what you can now to help avoid interest and penalties. Then choose one of these options:
    • Apply for a payment plan, also called an installment or online payment agreement, to pay off your balance over time. Fees may apply.
    • An offer in compromise lets you settle your tax debt for less than you owe. This used to be called the Fresh Start program.
  • Ask to delay collection. If you can’t afford to pay now because of your financial condition, you can ask us to temporarily delay collection.
  • If you disagree with the information on your tax bill, call the number on the notice or visit your local IRS office. Be sure to have a copy of the bill and any tax returns, cancelled checks or other records to help us understand why you believe your bill is wrong. If we find that you’re right, we’ll adjust your account and, if necessary, send a revised bill.
  • Request spouse relief. If your spouse made errors on your joint tax return and you didn’t know about it, you may qualify for tax relief for spouses.
  • If you’re in bankruptcy, please let us know immediately. We may temporarily stop collection. Call the number on your bill or 800-973-0424. Have this information ready: location of court, bankruptcy date, chapter and bankruptcy number.
  • If you don’t pay the amount due or contact us. We may take collection actions.

Plan for next year. You should pay taxes as you earn or receive income during the year. You can do this by having your employer withhold tax from your wages or by making estimated tax payments. For details, see IRS Tax Withholding Estimator and Estimated taxes.