A Simple Guide To The Different Types Of Business Taxes
If you have a business to open, be sure that you know you are going to pay for business taxes soon as part of the requirement of owning a business
. Business tax is to be paid in order to give support to the nation's budget. All citizens have the duty to pay for taxes and not only the businessmen.There are various taxes that are paid by business owners. The tax is dependent on the kind of operation the business has and also its size. Another thing that can affect the kind of tax the business pays is the number of workers working in the company. Large business taxation has a different scheme than that of small business taxation.
There are 4 standards business taxation that is stated in the law of taxation. These are the Excise tax, Self-Employment tax, Employment tax, and Income taxes. Various guidelines govern the tax payment scheme of each type of tax for business. To know more on the four kinds of business taxation, read the information below.
The first kind of tax is called the Employment tax. Many businesses with a number of employees working in it are paying the employment tax. Business owners are often required to pay for the taxes of the employees such as the Federal income tax, Social Security tax and Medicare taxes. However, this will depend largely on the kind of business you are running. Some taxes do not apply to all of the business sectors.
Income taxes also apply to business and its owners. Everybody pays the income tax and so business firms are no exception to the rule. There is an equivalent percentage of tax that businesses pay and this percentage is deducted on the annual earnings of the company. All businesses are required to pay the income tax to the government because it is stipulated in the law.
A company may pay for the income taxes of their personnel by subtracting a corresponding amount on the employees' wages. Tax payment is an obligation that citizens must fulfill. If individuals or businesses do not pay the corresponding tax, they can be filed with a tax evasion case.
The third kind of tax that will be paid by businesses is the Excise tax. It is called in such manner because it is the type of tax that is excess and not included in the standard type of tax a company pays. Excise taxes are for businesses providing special services or special goods. There are some taxes on special goods and therefore, businesses are obliged to pay for it.
The last kind of tax is called the Self-Employment tax. Those business owners that do not have any employees and are the sole owner of their business pay for self-employment tax. Examples of this tax are social security tax and Medicare tax and paying it helps the business owner because they will receive retirement benefits in the future. Therefore even if the individual is not working under a company, they still get retirement benefits if they pay the taxes.
If you do not know what kind of tax your business should pay, be sure to ask experts on the matter first or go to the internal revenue. They will give instructions and information on which tax to pay for. Be sure to pay for your business taxes on time so that you will not have any problems later on.
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