Owning a business can be a satisfying experience. You may have had many goals throughout your life all leading up to the owning and operating of your company that you recently started. While you may have considered various aspects of the business from start-up costs to employment contracts, you also need to make sure you understand the tax implications.
Business taxes are much more complex than personal taxes. In fact, your company will have to contend with various types of taxes. Therefore, it will likely work in your best interests to understand the different types, which ones may apply to your business and where you can seek help with properly addressing your company's tax obligations.
Types of taxation
The type of taxes you face can depend on a variety of factors. The type of business entity you operate under, whether you have employees, the type of products you manufacture or services you provide, and other aspects could all impact your tax situation. The types of taxes you may want to remain on the lookout for include the following:
- Income tax: If your business is not a partnership, it must file the proper tax returns and pay the necessary taxes for all income earned through business operations for the year. If you do have a partnership, your business will need to provide an annual information return with various tax information.
- Property tax: The location from which you operate your business may put you in line to pay property taxes on that location. Your business assets may also be up for taxation.
- Employment taxes: If you have employees, you must take care of federal unemployment tax, Social Security taxes, Medicare taxes and federal income tax withholding. Certain insurance taxes may also apply.
- Self-employment tax: If you run your own business, you will need to pay Social Security and Medicare taxes as part of your self-employment taxes.
- Excise tax: The Internal Revenue Service may subject your business to excise tax if you manufacture or sell certain types of products or use certain equipment or materials.
As you can see, business taxes are complicated, and this list does not show every type of taxation your business could face. You may not even feel entirely sure what taxes could apply to your company. Fortunately, you do not have to try to handle all of these complexities on your own. An attorney well versed in tax law can help you understand to what taxation your business may be subjected and how to properly handle those obligations.