If you are just new to business, it is very important to equip yourself with the right knowledge and understanding about business taxes, and your corresponding obligations as a business owner. It is important to know what tax law affects your business. Keep in mind that hiring employees means having payroll taxes to work on, and if you have a retail business, sales tax comes in.
When it comes to the state level, the different tax obligations you will likely encounter include sales tax, property tax, income tax, and unemployment insurance tax. The business equivalent of your social security number is the Employer Identification Number (EIN), which is required by businesses operating as a corporation or partnership, those with employees, and other obligations. Estimating taxes part is usually overlooked most especially if you are just a beginner when it comes to business, and previously had all your income tax covered by withholding. Every quarter, it is very important to make an estimate of state and federal income tax payment for self-employed business owners, then send a check to the state treasury and the IRS. It is regarded as a “pay-as-you-go” model appropriate and applying to sole proprietors, S corporations, and partners expecting to pay $1,000 in income tax a year, decreasing to $500 threshold for corporations. You can always find an IRS estimated tax guide to help you in calculating your estimated tax for your business. You should apply for a sales tax permit if you have a physical shop, warehouse, store, boutique, or office because sales tax applies to retail products, and collect applicable state and local sales tax from your customers. The tax is passed to your state revenue office either on a monthly or quarterly basis, to determine whether your business qualifies to have a physical presence in a specific state.
If you just started your business, it is important to withhold the Social Security (FICA), Medicare, federal taxes, and state taxes from your employees’ salaries if you already have started your businesses with your own employees. Keep in mind that there are also associated tax ramifications involving hiring independent contractors or freelance workers. If you need more details about business accounting and business taxes, feel free to check our website or homepage now. As a business owner, it is important to know your responsibilities and ensure that you are paying your taxes on time, you are paying your employees’ taxes right, and you are abiding the law. Allow us to help you out and make your life easier.