Business owners must know the different business taxes they need to pay as part of their obligations for owning a particular business. There are several kinds of business taxes, depending on the type of business operation you have, as well as its nature and size.
Another thing that affects business taxes is the number of workers you have in the company. Big businesses often have a different taxation scheme compared to that of a small business. Here are the types of taxes you will encounter as an entrepreneur.
Income taxes are the assessment businesses pay based on their earnings. With the right planning, you can stay in compliance with tax requirements. But, a common mistake in business is becoming delinquent with tax obligations.
One good practice is to create tax payments in your business’s budget and keep a separate holding account for it. If you find a need to transfer from the account in order to pay for operating costs, be sure to replenish the funds in time for the filing date for income taxes.
Selling taxable merchandise entails the registration of a sales tax number. You can do this by registering at the city or community where you conduct business. You will need this information every time you remit your sales reports and taxes.
Sales taxes vary from state to state. You can always follow up with the tax authorities to know the exact percentage that applies in your case. If you operate in Utah and you need help with your tax strategy, you can call professionals for assistance. They are in the best position to give advice on tax-related matters.
As your business grows and expands, you will need the help of more part-time or full-time workers. Adding to your staff places a brand new business requirement. For instance, you will have to deduct income taxes from your salaried employees every pay period and report the same by the filing due dates.
Excise taxes are levied on businesses that provide special goods or services. For example, there are excise taxes on diesel when transporting cargo in trucks. Purchasing new trucks also requires the payment of excise taxes, as well as when you purchase tires and coal products.
Sole proprietors or those who do not have any employees are obliged to pay for self-employment taxes. This kind of tax is made up of social security tax and Medicare fines. This helps entrepreneurs since they will receive dividends and retirement benefits from these agencies in the future. If a businessman is not working under a company, he still gets retirement privileges because he has completed his contributions in the form of self-employment taxes.
If you are unsure what specific business taxes you should pay for, ask the experts on the matter or visit the internal revenue services office in your locality. Always pay your business taxes on time to make sure that you will not face any problems later on.