Starting a business in Texas is not complicated. Doing it in the wrong order means redoing parts of it.
The order that works
- 01**Decide the structure.** Sole proprietor or an entity such as an LLC. Our note on that comparison covers the trade-offs.
- 02**Form the entity**, if you are forming one. Everything after this uses its legal name.
- 03**Get an EIN.** Free from the IRS, and needed for the bank and for clients.
- 04**Open a business bank account.** Separate from personal, from day one. This is the single habit that determines how painful your first tax season is.
- 05**Register for sales tax**, if you sell taxable goods or services.
- 06**Check local licensing** for your specific trade.
- 07**Set up bookkeeping** before there are transactions to catch up on.
- 08**Confirm insurance** appropriate to the work.
What new owners underestimate
- Quarterly estimated tax payments, which start the first year.
- Self-employment tax, which is an addition on top of income tax.
- How much time bookkeeping takes if it is left to year end.
- That collected sales tax is not revenue.
- That payroll obligations start immediately with the first employee.
Do the bank account and the bookkeeping first, before the business gets busy. Every owner who put those off says the same thing about their first tax season.
We do the setup and the ongoing work
LLC formation, EIN, bookkeeping, payroll and taxes are all things we handle in one place, in English and Spanish. Call (432) 257-7547 or come by 700 C Andrews Hwy in Midland. We work in English and Spanish.
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