IRS compliance management

Intro (excerpt/lead):Staying IRS-compliant is a top priority for US business owners and LLC founders — not just to avoid penalties, but to maintain funding, contracts, and growth. This practical guide covers the federal IRS obligations every U.S. business should track, plus how to handle state compliance touchpoints and practical next steps to keep your books, payroll, and filings in order.1) High-level compliance areas (what to watch)- Entity classification & federal filing pathway (LLC as disregarded entity, partnership, or corporation). Choose and document elections (Form 8832, S-corp election) and understand employment-tax treatment. (IRS: LLC guidance)- Employer payroll & withholding: withholding income tax, Social Security, Medicare, and Federal Unemployment (FUTA). Know deposit schedules (monthly/semiweekly) and use EFTPS for federal deposits.- Information returns: Forms W-2/W-3 for employees; Forms 1099-NEC/1099-MISC for contractors and certain payments. Note reporting-threshold changes that took effect for payments made in 2026 (see Pub. 15 guidance below).- Estimated taxes: make quarterly estimated payments for owners, partners, and corporations as required (Form 1040-ES, Form 1120-W, etc.).- EIN, business accounts, and IRS online access: obtain and maintain EINs; use the IRS Business Tax Account and EFTPS for payments and transcripts.- Recordkeeping & audit readiness: hold payroll records, proof of deposit, Forms W-2/1099, payer/contractor documentation, and receipts for 3–7 years depending on the item and statute of limitations.- Penalties and remedies: understand failure-to-file, failure-to-pay, and deposit penalties; remedies include filing, payment plans, offers in compromise, and penalty abatements in certain circumstances.2) Key federal forms, resources, and immediate actions (checklist)- Register for an EIN (IRS) if you haven’t already.- Read Publication 15 (Employer’s Tax Guide) and the Publication 15 calendar for deposit schedules and withholding rules: it’s the single best employer reference (Pub. 15, 2026 edition).- For payroll deposits, register for and use EFTPS and set up your Business Tax Account to monitor balances and notices.- Employee vs contractor: document classification decisions using IRS guidance and Form W-9 for contractors; if uncertain, consider filing Form SS-8 for a determination.- Information returns: confirm thresholds and filing requirements for 1099-NEC / W-2. Update contractor record intake and year-end workflows to capture TINs and addresses.- Estimated taxes: set reminders for quarterly due dates and check corporate vs individual requirements.- Keep these records: payroll registers, Form 941/FUTA filing confirmations, deposit receipts, Forms W-2 and 1099 copies, contractor agreements, expense receipts.3) Important changes and practical implications (2025–2026 highlights)- Publication 15 (2026) notes that the threshold for certain information reporting changed: payments of $600 or more were reportable in 2025, and a different threshold ($2,000) is referenced for payments made in 2026 in transition language. Verify current year instructions for Forms 1099/1099-NEC and the new Pub. 1099 when it posts. This affects when you must collect W-9s and issue 1099s for vendor/contractor payments. (See Pub. 15 excerpt below.)- Tax law and administrative changes (e.g., reporting of tips and overtime details) are evolving; consult IRS guidance and reputable tax firms for implementation timelines (professional guidance may be needed for payroll software updates and year-end reporting changes).4) State-specific compliance (how to cover state obligations)- State requirements vary: you’ll typically need to register for employer withholding, state unemployment insurance (SUTA), and (if you sell goods or taxable services) state sales tax/seller’s permit. States also set their own withholding rates, deposit schedules, and SUTA taxable wage bases.- Practical approach: maintain a state-compliance checklist per entity location(s): (1) find your state Department of Revenue or Taxation website, (2) register as an employer and for sales tax where you have nexus, (3) register for state unemployment with the state employment agency, (4) confirm state-level filing and deposit schedules.- Resources: the best starting point is each state’s Department of Revenue or Department of Labor website — many states publish employer registration guides and online portals. For multi-state businesses, track nexus footprints and consider professional multistate payroll services.5) Audit readiness & documentation- Keep chronological payroll journals, copies of payroll tax returns (Form 941, Form 940, state equivalents), proof of deposits (EFTPS receipts), W-2/1099 copies, and supporting documents for deductions and credits.- Create an internal checklist for each payroll period and year end: verify employee info (SSNs/TINs), reconcile payroll tax liabilities monthly, and correct errors promptly (see Pub. 15 guidance on corrections).6) Practical monthly / quarterly workflow (suggested)Monthly- Reconcile payroll register to general ledger, confirm deposits were made and recorded, and fix posting errors.Quarterly- File Form 941 (or Form 944 if eligible) and reconcile to deposits. Review 941 worksheets to ensure accuracy.Annually- Prepare and file Forms W-2, W-3, and required 1099s; complete Form 940 and reconcile FUTA credits with state unemployment payments.7) When to call a professional- Complex multistate nexus questions, S-corp vs partnership election questions, misclassified workers, large payroll corrections, impending IRS notices, or audit risk exposures.8) Quick action checklist for a business owner/LLC founder today- Set up/confirm EIN and Business Tax Account access.- Register for EFTPS and schedule automatic deposits for payroll liabilities.- Review 2026 Pub. 15 (and related updated Pub. 1099 guidance) for year-end reporting changes.- Ensure W-9 forms for contractors are on file and your payroll vendor/software is configured for updated reporting thresholds.- Create a state compliance tracker: employer withholding registration, SUTA registration, sales tax registration where applicable.