Being an entrepreneur is exciting, but it can be a lot of work to get started. One of the biggest hurdles you will have to overcome is the volume of paperwork involved. Today, we want to show you some steps to stay organized during this process, from how to get a federal tax ID to how to apply for an LLC.
#1 Determine Your Entity Type
Before you can begin doing anything with paperwork, you have to decide what kind of business you’re going to operate. Here is an overview of your options:
- Sole Proprietorship
#2 Get a Tax ID Form
Once you’ve figured out your entity type, you will want to get an Employer ID Number (EIN). This is a tax ID from the IRS that will allow you to hire employees and operate your business as a separate entity. Also, LLCs and corporations require an EIN, so it’s a good idea to get one no matter what.
#3 Get Professional Assistance
When filing out all of your paperwork, it helps to utilize the services of both an accountant and a lawyer to be sure that you’re doing everything correctly. They can tell you if you’re missing anything and what you can do to get it.
#4 File for Permits and Licenses
Operating as a business means that you have to get documentation at the federal and state level. Do some research to find out what kinds of permits you need (i.e., reseller’s license) and file for them as soon as possible.
#5 Keep Business Expenses Separate
Even if you’re operating as a partnership or sole proprietorship, organization is all about maintaining separation from your personal and business expenses. If you do this from the beginning, it will be much easier to itemize them after the fact. Also, try to have a paper trail for all transactions if possible.
Overall, you want to go into your new enterprise with an eye for organization. The more organized you are from the beginning, the better off you will be in the long run.