The tax implications closing a business vary depending on your type of business structure. You must file final state and federal tax returns for the year you go out of business. The chart below outlines typical IRS (but not state) actions for closing a business and forms for each action.
Action |
Forms |
Make final federal tax deposits |
- Electronic Federal Tax Paying System (EFTPS)
- Form 8109-B
|
File final quarterly or annual employment tax form |
- Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return
- Form 941, Employer's Quarterly Federal Tax Return
- Form 943, Employer's Annual Tax Return for Agricultural Employees
- Form 943-A, Agricultural Employer's Record of Federal Tax Liability
|
| Issue final wage and withholding information to employees |
- Form W-2, Wage and Tax Statement
|
| Report information from W-2s issued |
|
| File final tip income and allocated tips information return |
|
| Report capital gains or losses |
|
| Report partner's/shareholder's shares |
|
File final employee pension/benefit plan |
|
| Issue payment information to sub-contractors |
|
| Report information from 1099s issued |
|
| Report corporate dissolution or liquidation |
|
| Consider allowing S corporation election to terminate |
|
| Report business asset sales |
|
| Report the sale or exchange of property used in your trade or business |
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