All businesses are required to pay business taxes. Determining which taxes your business needs to pay will depend on what type of business entity you own. So, as a business owner, it is important that you understand the federal, state, and local taxes.
Here are the things you need to about business taxes.
What is an Employer Identification Number (EIN)?
Your EIN is like your Social Security Number, but this one is for your business.
What are the Types of Business Taxes?
As mentioned above, depending on what type of business entity you have will determine which taxes you will pay. Another thing to consider is the state where you do your business.
Here are the different types of business taxes.
- Income Taxes
All business entities, but partnerships, are required to file and pay taxes on the income they made during the year. Majority of the states have business income tax, but tax laws may differ from each state.
- Estimated Taxes
Estimated taxes are paid quarterly and these are for S corporations, solopreneurs, freelancers, and partners. It is important that your estimated amount is correct because you can be penalized if you are underpaying or missing paying these taxes.
- Self-employment Taxes
This is primarily for individuals who work for themselves and is consists of Social Security and Medicare taxes.
- Employment Taxes
As a business owner and employer, you have a responsibility to pay certain employment taxes. It includes Social Security and Medicare taxes, federal income tax withholding, and federal unemployment (FUTA) tax.
- Excise Taxes
These taxes are usually paid you make purchases on certain goods like gasoline, alcohol, tobacco, and airline tickets. It is usually included already in the price of the goods.
What Tax Form Should You Choose When Filing for Your Business Taxes?
When you know and understand what type of business entity you own, the next thing you need is to know the correct tax form to fill out.
Here is the list of business tax forms provided by the IRS. If you are not sure on what tax form to get, it is best that you seek help from a professional.
Here at The Oasis Firm, we can give you a free consultation to help you get started with your taxes. We will help you every step of the way to make it easier on your end. So, do not hesitate to book a consultation with us!