What are the types of business taxes?
The Types of Business Taxes
When running a business, it’s best to keep up with your taxes to avoid penalties. Throughout the year, a business can pay the taxes that they owe from their annual income quarterly or yearly. In many cases, a business chooses to pay yearly, it’s usually during tax season. There are four types of ways a business can file their taxes. With that being said, those ways are employment taxes, income tax filing, self-employment taxes, and excise taxes.
Employment Taxes
If you have employees, you have to pay taxes involving Medicare and Social Security. These employment taxes are required to be paid every quarter. The latest that you can pay them is a month after each quarter is gone. The federal unemployment taxes have to be paid during this time as well. Income tax filing is also included in this category.
Self-Employment Taxes
Self-employment taxes are also a part of business taxes. This comes into play when a person has a legally binding contract with another corporation but are held responsible for paying their own taxes. In some instances, the self-employed will name their business another name beside their government name. Nonetheless, they still have to pay taxes quarterly or annually. When filing their taxes, they can choose the standard deductions where the Internal Revenue Service gives you a standard amount of money that you can file for your business supplies and relationship status.
Excise Taxes
Businesses that own convenience stores or grocery stores have to pay taxes on products and firearm sales. This tax is usually up to 12%. The best part about owning a store is that you can buy your items in bulk and pay the taxes all at one time. When filing with the IRS, there are 4 different forms used. In particular, they are forms 720, 730, 2290, and 11-c.
To be a successful business, it’s best to ask the Internal Revenue Service for any help. In addition to that, there are classes that business owners can take to ensure that they understand how to file their business taxes. With the knowledge of understanding how to file your taxes, your business will be in a better position for years to come.