What Taxes Does Your Business Need to Pay?

What Taxes Does Your Business Need to Pay?

There is a lot involved in the taxing of small businesses, and the more you know, the better you’ll be prepared when Tax Day comes. Understanding the ins and outs of small business taxes will help you every year as you continue to run your small business. There is a lot that you already know about running a business, so why not know about the taxes involved as well.

Payroll Taxes

If you’re running a small business with employees, then you have to deal with payroll taxes. Payroll taxes encompass income tax and social security and Medicaid contributions. It is your responsibility as the employer to take care of these withholdings for your employees. Taxes like this should be paid regularly, and you should report on your tax payments quarterly. By staying on top of payroll taxes, you can avoid legal trouble and be sure that your business is operating legally and appropriately.

Income Taxes

As a small business owner, you need to pay taxes on the income your business makes. If you want to keep your taxes low, you need to pay attention to the business structure you choose. Knowing how to structure your company will ensure that you don’t spend more on taxes than you should. It is also important that you make appropriate deductions so that you can save money on your taxes. Business-related expenses can generally be deducted from your income taxes. Knowing what deductions qualify can help you to save on your business income tax each year.

Sales Tax

While your business is likely not responsible for paying sales tax itself, if you are in a state with sales tax, you are responsible to collect tax from your customers and pay that to the government. If you don’t collect taxes and you are required to by law, your business can get into trouble. Make sure to be familiar with any sales tax laws in your state so that you can meet the legal requirements and collect taxes as is necessary. There are a couple of different ways that sales tax can be required, so it’s important to know how your state works.

Understanding the ways your business will be taxed can help you to plan correctly for your business. No matter where your company is based, there are sure to be some taxes for you to pay, so be sure you follow the rules and get your taxes taken care of.

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