Changing Your Business or Getting Out of Business

Closing Your Business

Final return (Form 941). If you go out of business, you must file a final return for the last quarter in which wages are paid. If you continue to pay wages or other compensation for quarters following termination of your business, you must file returns for those quarters. See the Instructions for Form 941 for details on how to file a final return.

Note: If you are required to file a final Form 941, you are also required to furnish Form W 2 to your employees by the due date of the final Form 941. File Form W-2 and Form W-3 with the SSA by the last day of the month following the due date of your final Form 941. See the Instructions for Form W 2for more information.

Final return (Form 940). If you will not have to file returns in the future, check the box on the line below question C. Then complete and sign the return. If you start paying FUTA wages again, file Form 940or Form 940-EZ.

For partnership tax years beginning after 1997, the partnership's tax year closes with respect to a partner whose entire interest in the partnership is terminated, whether by death, sale or exchange, or liquidation. Previously, the partnership's tax year closed only with respect to a partner who sold, exchanged, or liquidated his or her entire interest in the partnership. For more information, see Publication 541.

If the corporation ceases to exist, file Form 1120 and check the Final return box. Do not file Form 1120-A.

A corporation must file Form 966 if it adopts a resolution or plan to dissolve the corporation or liquidate any of its stock. Exempt organizations are not required to file Form 966. These organizations should see the Instructions for Form 990 or Instructions for Form 990-PF.

Where to File

Important References:

Form W-2                                   Wage and Tax Statement
Instructions for Form W 2
Form W-3                                   Transmittal of Income and Tax Statements
Publication 15                           Circular E, Employer's Tax Guide
Publication 541                         Partnerships
Form 940 and Form 940-EZ  Employer's Annual Federal Unemployment (FUTA) Tax Return
Instructions  Form 940
Form 941                                   Employer s Quarterly Federal Tax Return
Inst. Form 941
Form 966                                   Corporate Dissolution or Liquidation
Form 990                                   Return of Organization Exempt from Income Tax
Instructions for Form 990
Form 990PF                              Return of Private Foundation or Section 4947(a)(1) Nonexempt Charitable Trust Treated as a Private Foundation
Instructions for Form 990-PF
Form 1120                                 U.S. Corporation Income Tax Return
Inst. Form 1120

Weblinks:

www.sba.gov/starting/indexcounseling.html