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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:

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  • 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):

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  • 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

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  • 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