It’s that time of year, when H&R Block and Jackson Hewitt commercials are running rampant to remind people it is tax income season. When being a small business owner taxes take on a whole new meaning. At least they did to me, especially when I realized I was responsible for more than I could even comprehend at the time.
Understanding these different taxes is very essential to keeping your company in the black and on Uncle Sam’s good side.
Estimated Taxes
Is the method used to pay tax on income that is not subject to withholding. This includes income from self-employment, interest, dividends, alimony, rent, gains from the sale of assets, prizes, and awards. These will be paid quarterly.
Franchise Taxes
Is a tax charged by some US states to corporations with a nexus (aka a filing obligation) with those states. The common feature of a state’s franchise tax is that it is not based on income. You must still file a return for your franchise taxes even if it zero. Trust that a $1,500 fine is no joke.
Sales Tax
A tax imposed by the government at the point of sale on retail goods and services. It is collected by the retailer and passed on to the state. As a small business owner you charge taxes to customers where your company has a physical location.
We have discussed tax write off’s on here before. You might want to brush up on those now, along with using a program such as Go Daddy Bookkeeping, to help you organize your business information for filing time.
It is important to put these tax due dates on your calendar so you are never charged a fine for missing them. It is your job to be informed about your small businesses regarding your tax obligation.
If you want to learn more about taxes (in general) the following are great books you can purchase via amazon or borrow from the public library.
Books to purchase
1. Tax Savvy for Small Business
3. J.K. Lasser’s Small Business Taxes 2015
4. Deduct It!
In addition, contact your local comptroller office and ask them questions and state your concerns. It is important to be knowledgeable. Most comptroller’s have a monthly workshop for small business owners that is free and for 2 hours.
How are you going to get a better handle on your taxes before the new year starts?
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