In order to prevent future problems and to have a successful and smooth-flowing business, it is very important to equip yourself with the right knowledge, skills, and attitude about business taxes, knowing your obligations, and ensuring that you are complying and doing everything to ensure that your business operations and finances are kept intact. It is your responsibility to know all the tax laws that may impact your business because it is never safe assuming that your tax obligations start only when you’re making a profit. Remember that if you have employees, you have payroll tax obligations, and if you are operating a retail business, there is also sales tax you need to work on.
There are several tax obligations involving the state tax level such as sales tax, unemployment insurance tax, income tax, and property tax. When it comes to getting a Federal Tax ID, an Employer Identification Number or EIN is considered the business equivalent of your social security number which is required by businesses with employees, operating as a partnership or corporation, 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. It is crucial for self-employed business owners to estimate their state and federal income tax payment, and send a check to the state treasury and to the IRS quarterly. This is a “pay-as-you-go” model applying to sole proprietors, S corporations, and partners who are expecting to pay $1,000 in income tax a year. It helps to check the IRS estimated tax guide to help you in calculating your estimated tax. Sales tax applies to retail products, and you need to apply for a sales tax permit if you have a physical store, shop, warehouse, or office, and collect applicable state and local sales tax from your customers. Every month or every quarter, the tax is passed on your state revenue office and it is used for determining if your business is qualified to have a physical presence in a particular state.
If you already have started a business and you have employees on payroll, it is important to withhold the Social Security (FICA), Medicare, federal taxes, and state taxes from your staff’s salaries. 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. It is important for a business owner to know the business tax laws affecting not just the business but also the employees. You can contact us now so we can help you in your business accounting and taxes needs, and ensure that you are able to achieve your short-term and long-term goals for your business, and grow and make your business successful.