All the Taxes Your Business Must Pay

As a business owner, you are required to pay several different types of taxes. Taxes come in several varieties: federal, state, and local. There are also different types of taxes depending on various business activities, like selling taxable products or services, using equipment, owning business property, being self-employed, having employees, and, of course, making a profit.

If you are just starting your business, you need to know what taxes to pay. If your business has changed - if you have bought property or started hiring employees, for example - you'll need to know about the taxes associated with these activities. 

Business Income Taxes

All businesses must pay tax on their income; that is, the revenue of the business less deductible expenses. How that tax is paid depends on the form of the business. Small businesses (sole proprietors and single-member LLCs), partners in partnerships, and S corporation owners pay taxes through their personal income tax returns. Here's how that works.  More

Gross Receipts Tax

Some states impose a gross receipts tax on businesses instead of a state income tax. In these states, gross receipts (revenues) of the business are taxed. Some states allow deductions for this tax and some types of businesses are exempt in some states. Sole proprietor businesses are usually exempt. Corporations and sometimes LLC's are most likely to pay gross receipts taxes.  More

Sales Tax

Sales tax is required to be collected by merchants in most states and paid to the state department of revenue. Specific products and services are sales-tax eligible and money must be collected and paid, and reports must be completed on a regular basis.

Don't forget online sales tax, which many states now are requiring for specific types of sellers (like affiliates).  More

Property Tax

If a business owns real property(real estate), the business must pay property tax to the local taxing authority (usually the city or county) where the property is located.The tax is based on assessed value (like your house).  More

Excise Taxes

Excise taxes are those paid by a business for certain types of use or consumption (like fuels) and activities (transportation and communications, for example).Excise taxes are paid to the IRS, either quarterly or annually, depending upon usage, on Form 720.  More

Self-Employment Tax

Self-employment taxes are those paid by sole proprietors and partners for social security and medicare, based on the income of the business.LLC owners also must also pay self-employment tax. Owners of corporations who work as employees do not have to pay self-employment tax. This article explains how self-employment tax works.  More

Employment Taxes (Payroll Taxes)

Employment taxes are those paid by the owner of a business for several types of taxes based on gross pay of employees. These taxes include FICA taxes (for social security/medicare), federal/state unemployment, and federal/state worker's compensation taxes. How all of these taxes work is explained in this article.  More

Franchise Taxes

States charge franchise taxes to corporations based on the value of the company. These taxes are similar to a state income tax. More

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