Step by Step
Mineral Wells and Palo Pinto County are open for business! It’s easy to start a business in Texas, but we’ll let you know that our city and county work to keep a favorable taxing and regulatory climate for business.
Follow these basic steps to get your business off the ground:
Select entity type:
- Sole Proprietor
- General Partnership
- Limited Liability Company
- Disregarded entity
- Partnership
- Corporation
- Limited Partnership
- Corporation
- “C” or subchapter “S”
All limited liability choices subject you to Texas Franchise Tax Filing Requirements.
Get set up to be an employer:
- File organization documents as necessary with State of Texas and the IRS.
- Fill out SS-4 to apply for Employer Identification Number (EIN).
- Texas application for sales tax permit.
- C-1 Texas status report.
- Other permits as necessary, depending on locality and type of business
- Sign up for Electronic Funds Transfer payments of payroll taxes and state unemployment taxes.
Get set up to hire employees:
- Know the difference between having employees versus contract workers.
- Have each employee fill out a W-4 form to declare exemptions.
- I-9 to verify eligibility for employment.
- Record employee names and Social Security numbers from Social Security cards.
- Report to State of Texas on a “New Hire” form with 20 days.
- Follow payday laws for other payroll deductions and pay stubs.
Each payday:
- Withhold federal income tax.
- Withhold Social Security taxes.
- Withhold Medicare taxes.
Tax deposits (annual, quarterly, monthly, or semiweekly):
- Withheld income tax from employees.
- Social Security and Medicare taxes that are withheld from employees, as well as the employer’s share. (Due date depends on your deposit schedule).
- Deposit FUTA tax in an authorized financial institution if undeposited amount is over $500/quarter.
- File form 941 (pay tax with return if not required to deposit).
- File C-3/C-4 with the Texas Workforce Commission.
- File sales tax as directed.
Annually:
- Remind employees to submit a new form W-4 if they want to change withholding.
- Reconcile forms 941 with your W-3 totals.
- Prepare and file W-2s and W-3 transmittal.
- Prepare 1099s and 1099 transmittal for all contracted labor over $600.
- File form 940 or 940 EZ for federal unemployment taxes.
Take the time to handle the business side of operations:
- Set financial goals and budgets.
- Prepare monthly financials for review and compare to previous periods.
- Reconcile credit card accounts.
- Stay in compliance with all the licensing and tax requirements.
- Work with a CPA to select an appropriate bookkeeping system, and get proper training.
- Maintain adequate records for management purposes, income tax preparation purposes, and capital lending purposes.
- Stay current on tax filings and reporting employment taxes, sales tax, franchise tax, income tax, and property taxes.
Marketing
- Do not underestimate initial advertising expenses. In many businesses, especially new ones, getting the word out early is vital.
- Do not underestimate the importance of location if your business relies on walk-in and impulse purchases.
- Have a website and keep it updated.
- Establish two-way communication with customers early on. Engage them so they can help you grow!
- Social Media
- Surveys
Your personal finances:
- Experts warn that your business could take 1-2 years to achieve profitability. Have a reserve fund to cover personal expenses.
- Consult a CPA and an attorney to help determine the best entity type for your business and your goals.
- When starting a new business, don’t bleed the company of cash flow. It is imperative to take care of the company first so it can later take care of you.
Sources:
Karen Thompson, CPA – Crawford, Carter, & Thompson LLP (940) 328-1167
Aric Kram , CPA – Kram and Associates, PC (940) 325-7881
Beth Henary Watson – Mineral Wells Area Chamber of Commerce (940) 325-2557
