The 6 Types of Tax Paid by Small Businesses: What You Need To Know About Small Business Tax Prep
Small businesses need to pay taxes just like individuals. Depending on the type of business you may own, there are a few different taxes you may be responsible for.
Since this can vary so much, it’s important to use small business tax prep to make sure you pay what you owe on time. Waiting too long can leave you in hot water or staring down the barrel of a big tax bill.
Your McAllen virtual chief financial officer has what you need to know about small business tax planning.
6 Types of Tax Paid by Small Businesses
1. Income Tax
Every person and business in the United States needs to pay income tax with the only exception being business partnerships, which must file an information return. If you made money through a business, you owe taxes. This is in addition to the income tax you will pay as an individual.
While Texas doesn’t have a state income tax, you do need to pay taxes to the federal government.
Paying income taxes can be complicated depending on the business, particularly since you need to pay taxes gradually over the year. Small business tax planning can help you make sense of the income tax you may owe.
2. Estimated Taxes
3. Sales Taxes
Texas businesses are required to take a sales tax when they make a sale. While the customer is the one that pays it, it’s the responsibility of the business owner to make sure this passes along to the state.
McAllen VCFO services can make this a bit easier since you’ll have help with passing this along to the state.
4. Employment Taxes
If you have employees, it is your responsibility to withhold taxes for them, including Social Security, Federal Unemployment, and Medicare. Your McAllen CPA can help make sure you’re withholding the right amount and paying on time.
5. Self-Employment Taxes
If you are self-employed, you have to pay both your own income taxes and the taxes normally paid by an employer. This is a bit higher and can be a bit more complicated to handle. If you’re feeling a bit stressed, small business tax prep can help ensure you complete this process correctly.
6. Excise Taxes
Excise taxes cover special services, goods, and activities. This includes things like alcohol, sports betting, gasoline, and more.
Do You Need Small Business Tax Planning? Let Abigail Y. Murray be Your McAllen CPA
Small business tax prep can be overwhelming to handle on your own. You have a lot to do, so let Abigail Y. Murray, CPA, help you. Our McAllen VCFO services make sure that you’re up-to-date on your taxes.