Taxes cause nightmares for many business owners. This is because they can be so complicated to understand. Completing taxes is also frustrating for many small business owners because it involves time spent away from other business-related activities.
If you are a small business owner who recognizes this situation, you may want to take a look at Corporate Business Solutions Reviews and find a professional who can help with your taxes. You may also want to take some time to get a better understanding of taxes yourself. Here is some basic information to get you started, and to help make completing your taxes less taxing.
Understanding business tax
Corporate or business tax is charged on the profits that a company makes. These taxes are due at different times of the year, depending on which type of tax is due. For instance, partnerships and S-corporations pay federal taxes which are due on March 15. In the case of Individual taxes and C-corporation taxes, they are due to be paid on April 15.
It’s possible to get a 6-month grace period which extends the deadline for these taxes. It’s also possible for taxes to be paid in installments, with an amount due every quarter.
Paying tax as a small business
It’s important to know that most small business owners pay tax at the personal tax rate, both personally and for the business. This is because around three-quarters of small businesses in the US are not corporations.
Another piece of information that small business owners should know is that they are entitled to a Qualified Business Income Deduction. This means that they are entitled to a 20% deduction of QBI which is the net amount of items of income, gain, deduction and loss that qualify.
Other taxes that a business needs to pay
There are other taxes that a business is responsible for paying. One of the main taxes is payroll tax which amounts to 7.65% of the gross payroll of a business. Other applicable taxes include:
- Capital gains tax which is payable on business investments and the sale of assets.
- Property tax which relates to buildings that are owned by the business.
- Tax on dividends from business investments.
You can see that there are several different tax considerations that business owners need to be aware of.
The benefits of getting help with taxes
While getting a better understanding of taxes, is good for any business owner, it may still be a good idea to get help with taxes. This is because completing tax returns can take time away from other business activities.
It’s also worth remembering that accountants and tax professionals have high levels of experience and expertise. This means they can ensure that a business gets the benefits of any potential tax advantages.
If you are a small business owner, you should be able to see the advantage of this. You should also remember that the best way of making tax less taxing is to get an expert to help you with it.