Closing a Business

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Here's a tip from the IRS.

Hi, I’m Helen… and I work for the Internal Revenue Service.

Is your business closing? If so, make sure you file the right tax returns for the year you close. And if you have employees, you must also deposit payroll taxes.

You’ll file a different form depending on whether you are a corporation, an ‘S’ corporation, a partnership, or a sole proprietor.

If you sell food or beverages, make sure you report tips. And be sure to mark "final return” in the correct space on the form.

Your employees will need their W-2s for the year the business closed so they can file individual returns.

If you have an employer identification number or an EIN, write to the IRS to close the account. The EIN will still belong to the business, so you can use it again later. You should also make sure the business has met all its state and local responsibilities. For more information, including a checklist, go to irs.gov and type the words "closing a business" in the search box.