Businesses close for several reasons. Money runs out, partners have a falling out or sometimes it’s just time to move on. Whatever the reasoning is, there are procedures for ending your business just as there were when you created it.
There are a few forms you must fill out to be legally out of business.
File your final tax return
You must file your last tax return through the date of your last transaction or date of issuing your final paycheck. This applies for those closing their business, selling or transferring and changing the form of their business. Don’t delay this step. The Department of Revenue gives you just under three weeks from your final day of business to submit your last tax return.
Cancel all applicable tax programs
Based on the nature of your business, you may have been subject to numerous tax programs. Sales tax, corporation tax, lodging tax and tobacco tax are only a few examples. You will want to fill out Form 22 whether you’re changing or closing your business to update your tax liabilities. Box 6 is what you will check if you are discontinuing your business.
Tie up loose ends
Cancelling your business license is the biggest and arguably the simplest step in the process. On your final return, you simply check the box that says you are ending your business. You do the same if you are filing multiple returns.
Within 30 days of closing shop, you must file a reconciliation of income tax withheld form along with copies of each W-2 issued to employees.