Paying the right taxesand doing it on time is an essential way to avoid paying fines or penalties. If you own a business or are about to own one, you should be familiar with all the necessary and compulsory taxes. It does not matter whether they are local, for your state, or even Federaltax. In fact, all of them are important when it comes to having everything in order.
Bear in mind that if you choose one type of business or another, as well as its structure, it may affect it. It will certainly change the type of taxes you must pay as well as the way. First and foremost, it is more than likely that you must have an Employer Identification number. This EIN will help you a lot since it is your Federal ID number. As soon as you set up your business, you had better get one.
If you are unsure of how to create one, IRScan help you with it here. It might be the case that you have one, but you have lost it. You can also click on the previous link and recover it from there. Moving on to Income tax, it is another must for businesses. Therefore, you will have to pay all the Federal taxes and file them. You must report any earnings you got during that year.
Do you have to pay Social Security as well as Medicare taxes if you own a business?
So, if you happen to be in that situation you must pay those taxes too. If you did not pay any tax to Social Security you could not claim any benefits in the future. For instance, a retirement or disability benefit. Besides, if you have got one or several employees, you will have to pay as well. There are some Federal duties, payments, and forms to fill in.
For instance, you will have to pay their Medicare and Social Security, FUTA, and Federal Income tax withholding. FUTA refers to the unemployment benefits of your employees. Furthermore, selling or manufacturing specific products may imply excise tax as well as paperwork. Regarding Property, you will have to pay different amounts depending on your state.
A further point is sales and use tax. There are certain services or goods that one may have to pay for it. Things that are excluded are utilities, newspapers, medicine, clothes, and food. Last but not least, you should not forget about the estimated tax. You will have to pay federal tax on income as long as it is not subject to withholding.