CopyPastehas never been so tasty!

Tax Information part 4

by dynamaxbusiness

  • 0
  • 0
  • 0

Federal Income Tax


Different business structures (sole proprietorship, partnership, corporation, or limited

liability company) have different income tax requirements regarding filing dates, forms

required, and tax rates and calculations. Federal income tax is a pay-as-you-go tax. Business owners generally pay income taxes in quarterly estimated income tax payments. For more information on estimated income tax payments, refer to IRS Publication 505, Tax Withholding and Estimated Tax.


Self-Employment Tax


Self-employment tax is a social security and Medicare tax for individuals who work for themselves, similar to social security and Medicare taxes withheld from the pay of wage earners. Social security benefits are available to self-employed persons just as they are to wage earners. Like federal income tax, self-employment taxes are paid through quarterly estimated tax payments. For more detailed information on self-employment tax, refer to IRS Publication 533, Self-employment Tax.


State Taxes


Every state levies some form of tax on small businesses, but in some states some business structures (especially sole proprietorships) have little to no tax imposed. To learn more about tax structures in any given state, visit the Business Owner’s Toolkit site or a list of taxing authorities in each state.


Local Taxes


Local authorities may tax personal property like machinery, equipment, furniture, supplies, leased equipment, and even movable machinery used in a business. Some cities and municipalities also levy income taxes on any business operating within their borders. Your county government or local municipality can provide information about the specific taxes that apply in your area and instructions for registering your business.


Sales and Use Tax


Sales taxes are added to the cost of a product or service and are generally paid by the customer. Most states and local taxing authorities impose a general sales tax on retail sales and certain services. Business owners are responsible for collecting these taxes and remitting them to the appropriate taxing authority. Goods purchased to resell from manufacturers or wholesalers are exempt from sales taxes because the tax will be paid by the retail customer. This is commonly referred to as a resale exemption.



Add A Comment: