Easy 11 Step Checklist for Online Sellers

Ro Williams
By Ro Williams

Selling goods through an online shop platform like Shopify, Etsy, or eBay may sound simple, but there’s more involved than you might think. Although your business is online, you’ll still need to make sure all your i’s are dotted and your t’s are crossed. Don’t worry - we’ve got your back. Use this easy checklist to make sure you're following the rules for managing an online business.

☑ Complete Your Business Registration

When you start a business, one of the first things you should do is register it. Your Business Registration represents when you officially established the business, giving it an identity in the eyes of the government and the IRS. Note: In some states, a Business Registration is also called an LLC or Corporation registration.

☑ Apply For Your Business License

Were you aware that a business license is completely different from a business registration? With a registration, you’re establishing the business. A business license, on the other hand, asks the state, county, or city you’re doing business in to grant you a license to conduct business. Note: Some states and counties do not require business licenses in order for you to sell there - check state business tax resources for every state you sell in to find out if you need a license. That’s right - you may need a business license in every state you sell to.

☑ Register For Your Employer Identification Number (EIN)

Your Employer Identification Number (EIN) is your Federal Tax ID - it’s like a business social security number. Every business needs one. Luckily, it’s free and easy to register for one - it only takes five minutes online. Don’t have one yet? Register for an EIN here

☑ Apply For Your Seller's Tax Permit

Most states require a seller's permit in order to sell goods. Once you have a seller's permit, you can also purchase goods at wholesale prices, for example, bulk t-shirts from Bella + Canvas. Note: In some states, a seller's permit is sometimes called a wholesale license. 

☑ Register For State Income Tax and EFTPS Accounts

All businesses in the U.S. need both a State Income Tax Account and an EFTPS account in order to pay state taxes to your state (like income tax), and federal taxes to the IRS (like estimated tax). Search your state’s business tax resources to find out what accounts you will need in order to pay your taxes correctly in your state. For federal taxes, visit EFTPS.gov to register for an account.

☑ Sign Up for an Accounting Tool 

Accounting software - like QBO or Zohobooks - helps you to manage your business financials. There are a ton of options on the market - try a couple until you find the right fit for you. Pro tip: sign up for the accounting tool that lets you export sales data directly from the platform you are using to sell your products (like Shopify).

☑ Create a Separate Business Bank Account

When starting any business, it’s best practice to open a business banking account in order to keep your personal banking separate from your business banking. Using one bank account for your personal and business transactions can cause massive headaches when it comes to your end-of-year taxes - two separate accounts will keep things a lot simpler.

☑ Complete Your W-9

A W-9 is a Request for Taxpayer Identification Number and Certification. This form is used for business owners and independent contractors. A traditional employee within a business would fill out an I-9, but because you aren’t a traditional employee (you’re the business owner), you fill out a W-9. Check out the W-9 here

Vendors (people who hire you for a project) may request that you send over W-9’s along with other documentation, like your seller’s permit. This is normal, especially when it comes to selling goods.

☑ File Your Annual Report / Statement

An Annual Report (may also be called a Statement of Information) is the way you renew your business each year and keep it in good standing with the state you are registered in. Your Business Registration will expire yearly, so make sure you file an Annual Report to keep your business in good standing.

☑ Get Secure Document Storage

You absolutely need secure, online document storage when you run an online business. Since most of your business is online, it makes sense to keep your business documents, like your Business Registration, Business License, EIN paperwork, W9, and Sellers Permit, in an online storage space that is easily accessible.

Having all the paperwork essential to your business’s identity stored in one place will help you more easily stay in compliance and easily retrieve documents as needed. We can help here! ComplYant has easy-to-use secure business document storage.

☑ Sign Up with ComplYant

Last, but certainly not least - set yourself up with a ComplYant account. Selling products online may mean you need to pay taxes in other states, and ComplYant helps you quickly and easily understand which taxes you owe in which states, and when you need to pay them. Get started, completely free here!

Ro Williams
By Ro Williams
Ro Williams is a part of the tax research team at ComplYant. Ro is an experienced professional in the accounting & tax industry and has previously held positions at an International Law firm and Public Accounting firms focusing on complex tax related issues. Ro spent her undergrad at Purdue University and is a devoted Boilermaker fan.

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