WORCESTER 508-471-3018
Metro West 508-709-0024

Tax tips for starting a business in Massachusetts

Whether an individual plans to start a business or has just started one, it's important to know the federal tax responsibilities he or she has. There are some basic tips the U.S. Internal Revenue Service (IRS) wants new business owners to know. For instance, it's important to know the type of business the company does early on. This may sound simple, but not many people decide if the business is an S corporation, sole proprietorship, limited liability company or partnership. Each type of business reports its activities differently on a federal tax form.

Business formation often requires an Employer Identification Number, or EIN, for tax purposes. Depending on the type of business it is, an owner may not need an EIN. People can check and apply for an EIN online at the IRS website. Many business owners already know that they are required to pay taxes. However, the type of business a person runs determines what type of taxes are paid. Generally, there are four types of business taxes: income tax, employment tax, self-employment tax and excise tax.

Another tip involves the accounting method. Each taxpayer is required to use a consistent set of rules that determines when it's time to report expenses and income. The most common methods business owners use are accrual method and cash method.

Recordkeeping is important to keeping a business successful. Good records typically help when it's time to submit tax return forms. Also, good records may help an individual monitor the business progress and prepare important financial statements. Often, individuals planning and forming new businesses in the state seek legal counsel. A lawyer who specializes in business and commercial law may help business owners understand tax laws and other business laws.

Source: Exponent Telegram, "IRS: Tax tips if you're starting a business", July 03, 2013

No Comments

Leave a comment
Comment Information
Email Our Team

Contact Us Today To Learn More

The skilled attorneys at SederLaw stand ready to handle even your most difficult legal issues. Turn to us for skilled representation to help you accomplish your legal goals.

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

An Impressive Track Record
Of Achievement In The Law


Worcester Office
339 Main Street
Suite 300
Burnside Building
Worcester, MA 01608

Phone: 508-709-0024
Phone: 508-471-3018
Fax: 508-831-0955
Map & Directions

Metro West Office
1900 West Park Drive
Suite 280
Westborough, MA 01581

Phone: 508-471-3018
Fax: 508-831-0955
Map & Directions