Reviewed and updated October 16, 2026
1. Cash that arrives after bills are due
A profitable DC business can still run short of cash when customer invoices remain unpaid. Maintain a rolling forecast showing expected collections, payroll, rent, debt payments and taxes. Review receivables by age, and give someone responsibility for following up on overdue balances.
Separate signed contracts from cash that is actually available. If your work includes government or institutional customers, plan around your own contract’s billing and acceptance terms rather than assuming every invoice will be paid immediately.
2. DC tax obligations beyond the federal return
DC has corporate and unincorporated business franchise taxes. An LLC does not automatically avoid them. The unincorporated tax has filing thresholds and exemptions, including a personal-services test; qualification requires reviewing actual income and activities. Sales tax and employer withholding are separate responsibilities.
Keep collected sales tax and payroll withholding out of operating spending. A dedicated reserve account and an account-by-account filing calendar make these obligations easier to see.
3–5. Payroll, regional work and unclear numbers
Hiring adds wages, employer taxes and administrative costs. Price new work using total labor cost, not just hourly pay. Maintain employee work-location records when staff work across DC, Maryland and Virginia; wage reciprocity does not settle every business-tax question.
Finally, close the books each month. Reconcile cash, review customer balances, distinguish owner transfers from revenue and compare actual margins with the budget. Bring the latest profit-and-loss statement, balance sheet and tax notices to a planning conversation so your next decision rests on consistent numbers.
Official sources
This guide provides general information. The rules depend on the tax year, jurisdiction and your circumstances. Ask our team which filing or planning steps apply to you.
