Accounting, Tax & Consulting Services
 

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Accounting and Tax Considerations for a New Business

Start Up

  • Selecting the most appropriate form of business (i.e., Proprietorship, “C” or “S” Corporation, Partnership, LLC)  “S” Corporation election needs filed by the 15th day of the third month from incorporation or beginning of fiscal year

  • File appropriate incorporation/entity organization documents

  • Owner contributions treated as debt or equity?

  • Cash vs. accrual basis of accounting

  • Fiscal or calendar year-end?

  • Applying for federal and state employer identification numbers

  • File SS-4 for employer identification number

  • File PA-100 for Pennsylvania registration

  • Applying for all applicable licenses and permits – contact local Chamber of Commerce

  • Fictitious name filing with county clerk and publishing

  • Segregate start-up expenditures; expenses incurred prior to opening doors for business

  • Segregate organizational expenses; legal and accounting fees

  • Writing a business plan, organizational chart and mission statement

  • Review of initial capital requirements and financing needs

  • Create a budget and cash flow forecasts, identify fixed costs and break-even point

Operational

  • Collecting and remitting the proper sales tax, if applicable

  • Hiring and documenting the necessary new employee information:

    • IRS Form W-4

    • INS Form I-9

    • Wage and hour guidelines

  • Review of independent contractor rules and regulations for non-employees

  • Withholding and depositing the proper payroll taxes (electronic tax payment system)

  • Opening the necessary checking accounts and limiting the use to corporate or business activity only

  • Selection of an accounting system; manual or computerized? Establishing accounting internal controls

  • Determining the proper chart of accounts to use for the general ledger

  • Segregate the following expenses for year-end reporting purposes:

    • Sub contractor payments

    • Entertainment expenses

    • Life and disability insurance on corporate officers

    • Organizational expenses: legal fees

    • Loan and leasing arrangements

  • Obtaining the proper workers’ compensation, liability and general business insurance policies

  • Contacting your business attorney for the legal issues involved

  • Implementation of file systems and a records retention program to meet regulatory guidelines

Disclaimer: This information is provided for guideline purposes only.  Please consult your accountant, tax advisor or legal counsel for additional information.