How to Set up a Sole Proprietorship in New York
Plan out your business carefully., Choose a name for your business., Apply for a license, if you are in a profession that requires one to practice., Apply for a business bank account., Request New York Publication 20, New York State Tax Guide for...
Step-by-Step Guide
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Step 1: Plan out your business carefully.
There are fees associated with starting a small business, and it is best if you wait until you are ready to begin your business before filing paperwork.
Most businesses choose to write a detailed business plan about their marketing, managerial and financial plans. -
Step 2: Choose a name for your business.
If you choose to use your legal name, as listed on your tax returns, then you will not need to register the name of your business.
However, if you want to use another name, then you are required to register a Certificate of Assumed Name with your local county clerk.
The assumed business name must be registered in the county where the business is located.
You will need to either visit your County Clerk office or go online to see if you can submit the forms online.
The certificate is often listed under "Business Filings." It is also called a "trade name," "fictitious name," or "doing business as" (DBA).
You may need to pay the Clerk a fee to get a copy of the form.
Fill out your personal information, business information and the name you would like to use.
Sign the form in the presence of a Notary Public.
The Notary Public will charge a fee for this service.
Return your completed, signed and notarized form to the County Clerk along with a fee of around $25 to $50.
You may also want to request a certified copy of your certificate for a $5 fee.
You will need this if you want to open a bank account under the new business name. , For example, lawyers, doctors, masseuses, chiropractors, architects and many more vocations require a state board to examine and certify you.
Visit op.nysed.gov to apply for a license. , Bring your Certificate of Assumed Business Name to the bank along with other identification and open a bank account.
Although this is an optional step, it is important if you want to separate your business and personal finances for record keeping. , This details all the types of taxes that you may need to either pay or collect, such as sales, withholding, cigarette, alcohol and more.
These taxes will depend upon the type of goods or services your business offers, but most businesses will need to register for at least 1 type of tax collection , Sole proprietorships without employees can consider these optional steps.
Request an Employment Identification Number (EIN) from the IRS.
An EIN is the number under which all employees' wages and withholding will be listed.
Some sole proprietors without employees find an EIN beneficial because it can be used in place of a social security number.
Register as a New York employer at nystax.gov.
You will need to have your EIN before registering.
You must be registered as an employer so that you can begin collecting unemployment insurance and withholding tax, and begin wage reporting.
Report all new employees within 20 calendar days of hiring them.
Go to the Tax Department's new hiring site, nynewhire.com.
Apply for Worker's Compensation Insurance.
This is mandatory for any New York business with employees.
Begin comparing rates at the State Insurance Fund website, nysif.com. , Use IRS Form 1040 to figure out the taxes you owe and file.
Report your sole proprietorship income in New York State using Form IT-201 if you are a resident.
Use Form IT-203 if you are a non-resident or part-year resident. -
Step 3: Apply for a license
-
Step 4: if you are in a profession that requires one to practice.
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Step 5: Apply for a business bank account.
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Step 6: Request New York Publication 20
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Step 7: New York State Tax Guide for New Businesses
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Step 8: from the Department of State.
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Step 9: Make preparations if you plan to have employees.
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Step 10: Report the income and business expenses from your sole proprietorship on your personal federal and state income tax returns.
Detailed Guide
There are fees associated with starting a small business, and it is best if you wait until you are ready to begin your business before filing paperwork.
Most businesses choose to write a detailed business plan about their marketing, managerial and financial plans.
If you choose to use your legal name, as listed on your tax returns, then you will not need to register the name of your business.
However, if you want to use another name, then you are required to register a Certificate of Assumed Name with your local county clerk.
The assumed business name must be registered in the county where the business is located.
You will need to either visit your County Clerk office or go online to see if you can submit the forms online.
The certificate is often listed under "Business Filings." It is also called a "trade name," "fictitious name," or "doing business as" (DBA).
You may need to pay the Clerk a fee to get a copy of the form.
Fill out your personal information, business information and the name you would like to use.
Sign the form in the presence of a Notary Public.
The Notary Public will charge a fee for this service.
Return your completed, signed and notarized form to the County Clerk along with a fee of around $25 to $50.
You may also want to request a certified copy of your certificate for a $5 fee.
You will need this if you want to open a bank account under the new business name. , For example, lawyers, doctors, masseuses, chiropractors, architects and many more vocations require a state board to examine and certify you.
Visit op.nysed.gov to apply for a license. , Bring your Certificate of Assumed Business Name to the bank along with other identification and open a bank account.
Although this is an optional step, it is important if you want to separate your business and personal finances for record keeping. , This details all the types of taxes that you may need to either pay or collect, such as sales, withholding, cigarette, alcohol and more.
These taxes will depend upon the type of goods or services your business offers, but most businesses will need to register for at least 1 type of tax collection , Sole proprietorships without employees can consider these optional steps.
Request an Employment Identification Number (EIN) from the IRS.
An EIN is the number under which all employees' wages and withholding will be listed.
Some sole proprietors without employees find an EIN beneficial because it can be used in place of a social security number.
Register as a New York employer at nystax.gov.
You will need to have your EIN before registering.
You must be registered as an employer so that you can begin collecting unemployment insurance and withholding tax, and begin wage reporting.
Report all new employees within 20 calendar days of hiring them.
Go to the Tax Department's new hiring site, nynewhire.com.
Apply for Worker's Compensation Insurance.
This is mandatory for any New York business with employees.
Begin comparing rates at the State Insurance Fund website, nysif.com. , Use IRS Form 1040 to figure out the taxes you owe and file.
Report your sole proprietorship income in New York State using Form IT-201 if you are a resident.
Use Form IT-203 if you are a non-resident or part-year resident.
About the Author
Julie Young
Brings years of experience writing about DIY projects and related subjects.
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