There are numerous factors to consider when you’re staring a new business — especially in Seattle. Washington State has more than a few perks for entrepreneurs, the most important being tax-free revenue.
Washington residents are exempt from filing their personal income tax returns within the state. Small businesses also benefit greatly, since the first $43,000 of revenue earned is completely tax free. That said, it’s one of the main reasons to get all your tax documents and business revenue organized. You want to be able to reap the benefits without issue.
One of the forms to fill out is a master business license application and in some cases you’ll need a contractor’s license as well. To do this you’ll need your EIN (Employer Identification Number) as well.
The first step — in getting your business off the ground — is filing your formation documents to the Washington Secretary of State. You need to do this even if your business structure is nonprofit or a partnership.
You can find the application at the Department of Revenue — and contrary to many government sites, it’s fairly easy to follow. You should be able to file online for this section as well. Plus, online filings are a bit faster than mailing in.
The documents needed for submission are called the Articles of Incorporation (for corporations) and a Certificate of Formation (for LLCs). If you need guidance on which type of entity to choose, contact our CPAs or visit our self-employed tax guide. In many cases, forming an S Corp is going to be the best option, but certainly not in every case.
Over the course of this process, keep track of your UBI (Unified Business Identifier) provided by the Secretary of State upon confirmation that your business has been approved and formed.
This number is the same one you used to apply for your business license. Depending on your location, you may file online or through the mail — again, online ensures a faster turnaround time.
When all this is completed, file anything and everything specific to your company. For instance, corporations and LLCs need to file their initial reports within 120 days after the formation document has been filed. Meanwhile, EIN are filed online to help maintain compliance with tax laws and regulations.
If you are obligated to pay federal taxes or start hiring employees, then you are required to get an EIN. You can obtain one yourself online (or hire an accountant to fetch one for you).
Of course, in addition to all this, you’ll need to get workers’ compensation and unemployment insurance. This part is fairly easy and it’s important to keep in mind this information will help you process deductions, calculate paychecks, ensure workplace health and safety and much more.
Every year, you’ll need to renew your business license. Of course, that’s approximately $71 and can be completed online. Notices are sent out and will arrive 45 days before the due date.
On the surface, this may appear to be a lot of work but it’s very manageable. Of course, you can always hire our CPAs to assist and speed up the process, in which case, the most important work on your behalf is to dotting your ‘i’s and crossing the ‘t’s.