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Closing Your Business: A Compliance Checklist from Kamish & Associates

  • Writer: Zachary Kamish
    Zachary Kamish
  • Jul 8
  • 2 min read

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At Kamish & Associates, we understand that closing your business can be a difficult decision, whether it’s due to retirement, a shift in focus, or external factors. No matter the reason, it’s essential to properly handle the accounting and tax compliance steps to avoid costly issues down the road.

Here’s a comprehensive guide to help you wrap things up legally and responsibly.


1. Inform the IRS: Final Federal Filings

When closing your business, you must notify the IRS and file final federal tax returns.

For Sole Proprietorships, Partnerships, and Corporations:

  • Check the Final Return Box on your last federal return (Form 1040-Schedule C, Form 1065, or Form 1120/1120S).

  • File Form 966 (Corporate Dissolution or Liquidation) if you’re closing a corporation.

  • Report Asset Sales or Liquidation: Include the gain or loss from the sale or disposal of business assets.

  • Cancel EIN: Send a letter to the IRS to close your business account after filing final returns.


2. Final Payroll Tax Responsibilities

If you have employees, there are several payroll obligations to fulfill before officially closing.

  • File Final Form 941 or 944: Indicate it’s the last return.

  • Issue Final W-2s: Provide to employees and submit to the SSA.

  • File Final State Payroll Returns: This varies by state—ensure quarterly reports are complete.

  • Pay Any Remaining Payroll Taxes: This includes federal and state withholdings, FUTA, and SUTA.

  • Close Payroll Accounts: Notify your payroll provider and terminate tax accounts with the IRS and your state’s department of revenue or employment agency.


3. Sales Tax: Final Returns and Account Closure

If you sell taxable goods or services, you’ll need to file and pay final sales tax returns.

  • File Final Sales Tax Return: Include all outstanding collections.

  • Pay All Due Sales Tax: Make sure no balances remain.

  • Close Sales Tax Permit: Contact your state’s Department of Revenue or file online to terminate your sales tax registration.


4. Other Compliance and Administrative Tasks

Don’t overlook these final steps in the business closure process:

Cancel Licenses and Permits

  • Cancel local, state, or federal licenses/permits your business held.

Dissolve the Legal Entity (if applicable)

  • File Articles of Dissolution with the Secretary of State (for LLCs or Corporations).

Close Bank Accounts

  • Settle all outstanding payments and close business checking/savings accounts.

Notify Stakeholders

  • Inform customers, vendors, contractors, and creditors about your business closure.

Retain Records

  • Keep tax and employment records for at least 7 years, depending on your business type.


Need Help? We’re Here for You

At Kamish & Associates, we provide compassionate, detailed support throughout the business closure process. From final payrolls to dissolution paperwork, we’ll make sure you wrap things up with confidence and compliance.

📞 Contact us today for a personalized exit checklist or closure consultation.

 
 
 

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