Iowa has some of the nation's most stringent sales tax reporting rules.
Take the same steps to start a small business in Iowa as you would for any state but pay special attention to state small business and tax reporting regulations. Iowa has some of the strictest state tax reporting rules in the nation. So you must understand Iowa's tax reporting requirements for the type and structure of your small business before you open for business. Doing your homework will help you to avoid expensive and inconvenient audits, interest and penalties later on.
Instructions
1. Form goals and objectives for your new small business in Iowa. Some people like to write a detailed, formal business plan. This is especially helpful if you need money to start your small business and plan to apply for loans or other types of funding.
2. Decide on one of business structure. Forming a corporation or limited liability company (LLC) can protect your personal assets from business debts. Additionally, incorporating can provide credibility and tax benefits. But a sole proprietorship has the advantage of simpler bookkeeping and reporting.
3. Register "Doing Business As" names if your corporation or LLC will do business under a name other than its legal name filed with the Iowa Secretary of State.
You can also conduct a trademark search to make sure your unique company name isn't already in use. Businesses file names on a per-state basis. So other companies may be using the same or a similar name in other states.
4. Find out whether your business qualifies for financial assistance from the State of Iowa, including loans and grants. Iowa offers many sources of funding. The type of funding, what it is is available for comment and who it is available to changes all the time so contact the local U.S. Small Business Administration offices in Iowa and the Iowa Department of Revenue to see what kind of funding is currently available.
5. Find out if there are any local or state licensing requirements for your business and apply for them before your begin to operate.
6. Small businesses in Iowa get general business insurance from an insurance provider. If you hire employees you will also want to obtain unemployment and workers' compensation insurance.
7. If you establish an Internet presence, or transport products find out whether you are required to pay state taxes in Iowa for sales or services to customers in other states. You also need to find out if you are required to pay taxes in the states that you are connected to through Internet marketing and transport.
8. Find out if the goods or services you will be selling are subject to Iowa sales tax, familiarize yourself with Iowa's local option tax and find out if you need to pay a consumer use tax. Also find out if you qualify to use sales tax exemption certificates. Read the Iowa Department of Revenue's Sales and Tax Use booklet to get a good overview of what goods and services are subject to Iowa sales tax. The local option sales tax is enacted at the option of counties and cities.
9. Find a computer that you can use regularly to go on-line for your IA business and tax reporting. The state of Iowa has almost completely eliminated manual filing. So set up all reporting and payments on-line.
10. Set up electronic filing and payment for your IA business reporting and taxes including for sales, use, withholding and state unemployment. You will need to get Iowa efile numbers and register on-line for a sales tax permit if taxes apply to the sale of your goods or services.
11. If needed, get a federal Employer Identification Number (EIN) before you set up your online Iowa business reporting. Not every small business in Iowa needs an EIN but you will need a federal Employer Identification Number in the state of Iowa if any of the following apply to you:
1.You are a sole proprietorship and have employees
2.Your business is a corporation
3.Your business is a partnership
4. You need to pay federal excise taxes
5. You sell alcohol, firearms or tobacco
12. Decide whether your business is going to have employees. If you have employees, each employee will have to fill out an Iowa W-4 in addition to the federal W-4. Read Information about Iowa Withholding Tax booklet to learn about the correct procedures for collecting and depositing IA withholding taxes.
13. Remember to make IA estimated income tax payments every quarter in addition to Federal Estimated taxes.
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