You’re a new business owner, wondering if you need to file taxes for your first year. The answer is: it depends.
There are a few things to consider when it comes to filing income tax or sales tax returns as a new trade or business owner, a self-employed, or a member of a partnership. The most important thing is to understand your business’ tax classification. Are you a sole proprietor, a corporation, or a partnership? Each of these classifications has different tax requirements.
Contact an accountant or the IRS for more information about filing taxes for your first year in business. They will be able to help you understand your specific tax situation and what steps you need to take to stay compliant.
The short answer is yes, you do have to file taxes for your first year in business, and it’s not as daunting as it may sound.
The first step is to determine which tax bracket your business falls into. If your annual taxable gross revenue is $100,000 or more, you pay the Business and Occupation (B&O) tax. All other businesses must file taxes electronically using My DOR, DOR’s online filing system.
Washington has a gross receipts tax assessed on your total taxable sales in the state, regardless of where those sales occurred. For more information on Washington’s business and occupation tax, contact us.
There are several benefits to filing your taxes. If you are a sole proprietorship business, you must have a legal license number to pay your employment tax.
First and important, your business is legal, and You need to file to remain in compliance with the government.
Second, it’s an opportunity to get a financial report for your business. This report can help you make smart decisions about your company’s tax due.
Third, it’s important to file taxes to take advantage of any deductions or credits you may be eligible for health insurance. Finally, filing taxes is essential to maintain good records and protect your small business from possible audits.