When it’s time to close a business in California, there are many important steps that must be followed to ensure the requirements of the IRS and the California tax agencies are met. Failing to do so can result in the tax agencies coming back years later to collect tax on income you may not have earned, or tax on workers you no longer employed. Different rules apply depending on the type of entity and whether there are shareholders, assets to distribute and employee benefit or retirement plans in place. In addition to filing final income tax returns, business owners should also be sure to file other applicable final tax returns including sales and use tax returns and employment tax returns. The IRS, California Franchise Tax Board, Board of Equalization and Employment Development Department each provide guidance on the steps to following when closing a business.
You may find general information here for each agency:
IRS
FTB
BOE
EDD
