Closing Your Business
- Closing a Sole Proprietorship
- Filing Your Final Federal Employment Tax Returns
- Independent Contractors
- State Taxes
- Partnerships and Corporations
- Unamortized Costs and Winding Up Expenses
More Tax Topics
- Business Structures
- Start-up Costs
- Depreciation
- Car Expenses
- Home Office Deduction
- Travel Expenses
- Hiring Workers
- Meals and Entertainment
- Retirement
- Top Tax Myths
- Per Diem Rates - IRS Publication 1542 Oct 2011 for Travel Within the Continental U.S (for employers who pay a per diem allowance to employees)
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Closing a Partnership
If the partnership is closed:
- Indicate on Form 1065, line G(2) if it's the final return.
See winding up expenses when closing a business.
Closing a Corporation
If the corporation is closed:
- Form 1120 - Line E(2) is used to indicate it's a final return.
- Form 1120S - Line F(2) is used to indicate it's a final return.
Notify the IRS:
The IRS must be notified of the corporation's termination by filing Form 966, Corporate Dissolution or Liquidation.
When to file Form 966:
File Form 966 within 30 days after the plan or resolution of liquidation is adopted.
State Requirements for Dissolving a Corporation
You must also comply with your state's requirement for dissolving the corporation.
A corporation must be formally terminated and state tax obligations must be up to date. It's not like a sole proprietorship, where you just stop filing Schedule C and go on your merry way.
Contact your state's Corporation Commission (or whatever the appropriate agency is called in your state) to find out the appropriate procedures to follow.
Related Links
- Winding Up Expenses When Closing a Business.
- Was Your Sole Proprietorship Temporarily Inactive for One or more Years?
- Resuming Business Operations
- What to Do if You Have Employees When You Close Your Business
- Employment Tax Returns
- Did You Pay Independent Contractors $600 or More Your Last Year of Business?
- Form 1096
- State Unemployment Tax (SUTA)
- Sales Tax
- State Income Taxes
Copyright © 2008-2013 Larry Villano. All rights reserved.