A business owner should be clear on the types of taxes they are responsible for. Primarily, business structure determines what types of taxes will be paid. Here is a synopsis of four primary taxes that may have to be reconciled at different stages of the year:
Income tax is used to bill individuals for their wages or investment income, in proportion to their level of net income. Partnerships file an information return, while all other businesses must file annual returns.
Employers have the following tax obligations:
• Social security and Medicare taxes
• Federal income tax withholding from employee wages
• Federal unemployment tax (FUTA)
Employers must accurately deposit and report federal income taxes, federal unemployment taxes, social security taxes, and Medicare taxes. Employers must select between two deposit schedules at the beginning of every calendar year. They can either deposit federal taxes monthly or semi-weekly. FUTA Tax deposits are normally due within the month after each quarter. There are also quarterly reporting requirements for federal income taxes, social security, and Medicare taxes.
Self Employment Tax
Self–employment tax, or SE tax, is a Social Security and Medicare tax paid by individuals who work for themselves or own their own business.
Excise taxes are particular to goods and products like petroleum, alcohol, tobacco, firearms but there is a broad range of categories and forms that encompass the qualifications for submitting excise tax to the agency of authority.
Remember a company with up to date and consistent tax preparation is much more valuable in case your long term plans are to sell your business. In order to avoid mistakes and meet critical deadlines, contact a tax consultant early on to secure compliance with the agencies involved.
If you require immediate assistance visit my website at JeffreyLevine.Solutions to schedule a free consultation regarding your tax concerns.