Post by ccoyle78 on Nov 5, 2017 18:14:24 GMT -6
Different Types of Business Taxes
There are many different types of taxes a business may be required to pay. Here’s a breakdown of the different types.
The following taxes are associated with your Personal Income Tax Return. They are possibly on your return if you file a Schedule C and have a profit on the bottom line.
Self Employment Tax: This is Medicare and Social Security. If you are an employee of someone you have some of this removed from your paycheck every week. The employer pays the other half. When you are Self Employed then you are responsible for paying BOTH portions on all PROFIT of the business. The rate is 15.2%. The good thing is there is also a deduction of half on the front side f the tax return that will lower the amount due.
Income Tax: This is the tax based on your Adjusted Gross Income minus deductions and exemptions. If you have a profit in your business, this number will be larger than when you did not have a business.
State Income Tax: This number is usually based on the Federal Adjusted Gross Income, so your profit will be included in here and is taken into consideration for the final percentage calculation.
State SALES Tax:
Sales tax is imposed by some states as a way to collect monies to run the state and local government. This is collected by businesses for sales to customers within their own states (out of state sales are still exempt as of now). That they have a nexus within. A nexus happens when the business has some kind of presence within the state.
Every state has a different sales tax rate, a different way to calculate and collect these taxes, different items that are considered taxable and non taxable. They also have different rules depending on if they are a Destination or an Origin State. To find out if your state is Destination or Origin Please Google “Is (Enter state name) a destination or origin state.
Every state has different rules on if Shipping is also included when figuring sales tax. The also have different regulations on if a price is allowed to include sales tax or if it is to be added to the price.
This tax is NOT INCOME TAX. It does not get a deduction for materials and supplies bought. It is strictly figured on the amount of YOUR SALES. That’s it.
Business Tax:
Some states will also have a Business Tax. This is called many different things. From Business Tax, to Business PErsonal Property Tax, to a Business Privilege Tax. This is an ADDITIONAL tax imposed by your state or local government offices for the privilege to have a business. It is NOT Income tax. It is NOT Personal Property Tax( Real Estate or Car Tax). It is usually based on either your number of sales, your inventory, or your assets used within the business. It could be based on all 3. Depends on the state. The date this tax is due will also vary.
If you are a Corporation or an LLC you may also have to pay an additional Franchise Tax. This is usually based upon sales for the year.
There are many different types of taxes a business may be required to pay. Here’s a breakdown of the different types.
The following taxes are associated with your Personal Income Tax Return. They are possibly on your return if you file a Schedule C and have a profit on the bottom line.
Self Employment Tax: This is Medicare and Social Security. If you are an employee of someone you have some of this removed from your paycheck every week. The employer pays the other half. When you are Self Employed then you are responsible for paying BOTH portions on all PROFIT of the business. The rate is 15.2%. The good thing is there is also a deduction of half on the front side f the tax return that will lower the amount due.
Income Tax: This is the tax based on your Adjusted Gross Income minus deductions and exemptions. If you have a profit in your business, this number will be larger than when you did not have a business.
State Income Tax: This number is usually based on the Federal Adjusted Gross Income, so your profit will be included in here and is taken into consideration for the final percentage calculation.
State SALES Tax:
Sales tax is imposed by some states as a way to collect monies to run the state and local government. This is collected by businesses for sales to customers within their own states (out of state sales are still exempt as of now). That they have a nexus within. A nexus happens when the business has some kind of presence within the state.
Every state has a different sales tax rate, a different way to calculate and collect these taxes, different items that are considered taxable and non taxable. They also have different rules depending on if they are a Destination or an Origin State. To find out if your state is Destination or Origin Please Google “Is (Enter state name) a destination or origin state.
Every state has different rules on if Shipping is also included when figuring sales tax. The also have different regulations on if a price is allowed to include sales tax or if it is to be added to the price.
This tax is NOT INCOME TAX. It does not get a deduction for materials and supplies bought. It is strictly figured on the amount of YOUR SALES. That’s it.
Business Tax:
Some states will also have a Business Tax. This is called many different things. From Business Tax, to Business PErsonal Property Tax, to a Business Privilege Tax. This is an ADDITIONAL tax imposed by your state or local government offices for the privilege to have a business. It is NOT Income tax. It is NOT Personal Property Tax( Real Estate or Car Tax). It is usually based on either your number of sales, your inventory, or your assets used within the business. It could be based on all 3. Depends on the state. The date this tax is due will also vary.
If you are a Corporation or an LLC you may also have to pay an additional Franchise Tax. This is usually based upon sales for the year.