Closing a business account requires forethought and planning. Reasons for closing the account and the type of account determine the exact steps to take. IRS and local tax accounts require the filing of specific forms. Local banks and other financial institutions may charge an account closing fee depending on how long the account was in existence.
Closing a Business Account
Determine the type of account to close. Tax accounts require the filing of forms and contact with the Internal Revenue Service (IRS) and with state and local taxing authorities. Financial accounts require contacting the financial institution and filling out the appropriate forms.
Assemble and fill out the required forms. Closing of financial accounts requires notarized signatures from partners or official minutes of a corporate meeting giving authorization to a specific person to close the account. Official corporate minutes contain a corporate seal and the signature of an officer.
Pay the current tax bill. Tax accounts cannot be closed until the current balance is paid in full. Complete all tax returns and submit tax payments to the proper tax agencies. After all taxes are paid, request closing of the tax accounts by filling out the proper forms. Federal forms are obtained online through the IRS website at IRS.gov. State and local forms are usually found at local libraries or local revenue offices. Request refunds of overpaid taxes and excess escrow at this time.
Balance financial accounts to determine the actual balance. To close a financial account, request a withdrawal of the actual balance and instruct the financial institution to close the account when the balance equals zero. Investment accounts require the selling of securities and other items in order to close out the account. Account closing fees may apply to checking, savings and brokerage accounts. Certain accounts can be closed and the amount rolled over into a similar account at a different financial institution. Account rollovers are completed electronically.
Pay off outstanding balances on credit cards and lines of credit. Once the account is paid in full, send a letter on company letterhead to the lender requesting closure of the account. Notarized signatures may be required depending on the legal structure of the business.
When filing tax forms through the U.S. Postal Service, send them via certified mail. Be sure to double check the address for accuracy. Sending forms to an incorrect address will cause delays in the closing of the account.
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