The Basics of Business Taxes

Whether you’re a new business owner, a soon-to-be business owner, or just someone who needs to brush up on the law, it’s important to have a clear understanding of the various types of business taxes that exist and which ones apply to your business.   

Most businesses pay federal, state, and local taxes. However, that’s where the similarities end. Different businesses pay different taxes based on things like what they sell, what their business structure is, and more.

Because business taxes are so complex, it’s highly advisable that you keep a few basic things in mind and that, when in doubt, you have a tax professional you can fall back on for help and advice.

How Business Type Affects Taxes

As mentioned above,the type of business you have will have an impact on the taxes you pay.

For example, you will pay taxes through personal income tax returns if your business falls into any of the following categories:

l  Sole proprietorship

l  Single member LLC

l  Partner in partnership

l  S Corporation

Even though all of these businesses pay their taxes via their own returns, how they have to go about it and which forms they need to fill out will vary from one business type to the next, further showcasing how important it is to have good, professional tax help.

Property Taxes for Businesses

Another thing that you will need to keep in mind is that, if your business owns any property, such as a store or other building in which business is conducted, you will need to pay property taxes.

The amount of taxes that you will have to pay will be based on the value of your property.

Self-Employment Taxes

As if there weren’t enough types of taxation already, you may need to also pay self-employment taxes. Typically, these taxes are required for sole proprietors, LLC owners, and partners and are based on the income that the business brings in.

As you can see, there are many types of taxes that you could be subjected to as a business owner- these are really just a few of many. As such, make sure that you are well informed on business taxes and that you are working with a professional who can ensure you handle all the taxes for your business correctly.