Starting a business in Wisconsin takes significant effort, but it could set you up for the career of your dreams. If you have a solid idea for a business, or experience in a management role, you could potentially get started in the span of a few weeks- all you need is a business plan, and the necessary registration to get started.
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Steps to Getting a Tax ID (EIN) Number and Register Your Business in Wisconsin
- Wisconsin Means Business
- Forming a Business in Wisconsin
- Federal Tax ID (EIN) Number Obtainment
- Wisconsin State Tax ID Number
- Localized Licenses and Permits in Wisconsin
1. Wisconsin Means Business
Wisconsin has been a welcoming state for entrepreneurship for years, and you don’t have to look far to see those effects. There are currently more than 440,000 small businesses in Wisconsin, which represent an overwhelming majority of businesses in the state. Together, they employ more than half of Wisconsin’s working population- or more than 1.2 million people.
On top of that, economic conditions in Wisconsin are superb. Unemployment has been consistently falling for years, and the state is currently ranked as one of the best in the country in terms of economic growth. You’ll have your choice of thriving big cities to choose from when you move there (or start a business there), including Milwaukee, Madison, and Green Bay.
2. Forming a Business in Wisconsin
After coming up with your business idea, you’ll want to research and flesh out that idea with a solid business plan. This all-in-one document will guide your research into your market opportunities, competition, and plan to make money for the first several years of operation (and beyond).
Once you have a business plan in place, you’ll be able to decide which business structure best suits your idea. These are some of your best options:
- Sole proprietorships and partnerships. Sole proprietorships and partnerships are practically the same, except partnerships involve two or more co-owners. They’re the simplest business type to start, own, and manage, but they offer virtually no liability protection- that means you’ll take on any debts or legal responsibilities from the business. For taxes, you’ll pay personal taxes on any money you make as an individual.
- Limited liability companies (LLCs). LLCs are considered to be distinct legal entities, or pass-through entities. They’re a bit more complex to set up, but they offer their owners more liability protection than a simple sole proprietorship; for example, an LLC is allowed to have debts of its own. They don’t owe taxes at the federal level- instead, you’ll pay taxes as an individual on any money you take as revenue or profit from the business. And in Wisconsin, LLCs also won’t owe any state-level taxes, though you will need to file an annual report. The only exception here is if your LLC is taxed as a corporation at the federal level, it will be taxed as a corporation in Wisconsin.
- Corporations. Corporations are the most complex business to start and manage, since they’re subject to more laws and restrictions- but for good reason. Corporations are treated as distinct legal entities like LLCs, but offer even more liability protection. They also have the power to issue public shares to raise funds, which is especially valuable if you plan to expand on a national level. One of the biggest downsides is that corporations pay taxes on all eligible income, and owners pay taxes on money they make from the corporation as well, resulting in double taxation. In Wisconsin specifically, corporations will owe a flat 7.9 percent corporate tax rate on all eligible income earned in the state.
3. Federal Tax ID (EIN) Number Obtainment
Many businesses will need an employer identification number (EIN), or federal tax ID number to begin operations. LLCs with more than one member, partnerships, and corporations will need one by default. You’ll also need one if you plan on hiring any employees, if you’re going to open a business bank account, and for several other important functions.
Your federal tax ID will work like a social security number (SSN), but for your business, rather than you as an individual. You’ll use it on a variety of applications, and to file taxes at the end of the year. Getting one can be simple- if you use our federal tax ID number obtainment services, we can get you registered with the federal government and set up with a tax ID in less than an hour!
4. Wisconsin State Tax ID Number
In some cases, you may also need a Wisconsin state tax ID number. Though similar in name and function to a federal tax ID number, you’ll use a Wisconsin state tax ID for different functions. This number will register your business with the state of Wisconsin, which is important if you’re selling taxable goods and services in the state, or if you’re going to hire employees. You’ll also need it if you’re going to owe state-level excise taxes.
5. Localized Licenses and Permits in Wisconsin
At the state level, your business may require a special license, permit, or certificate to operate. Since there are hundreds of possible documents to acquire, your best bet to find the certificates relevant to you is to visit Wisconsin’s business portal and perform a search. You’ll also want to make a stop at your local Chamber of Commerce. In addition to state-level permits and licenses, you may be required to get permits at the city or county level. Because these laws and regulations vary dramatically from city to city, you’ll need to contact your own city officials to learn more.
When you’re ready to start a business, you don’t want time-consuming challenges to stand in your way. That’s why it pays to use our federal tax ID and Wisconsin state tax ID obtainment services. In an hour or less, we can get your business registered and give you the ID numbers you need to start making money.