Twenty years ago, when I started my business, I learned the hard way that I had to pay enterprise taxes in the form of quarterly federal and state taxes. My ignorance had put me in a financial bind. I had to come up with a big chunk of money, which included taxes, late fees and penalties. Don't let this happen to you!
What follows is a normal overview of the taxes most small businesses (general non corporations) are required to pay and the reports that need to be filed. The first quarter of every year, January in particular, tends to be a heavy tax month for most businesses.
For the sake of simplicity, let's group taxes associated to our small business/practice into two broad categories: wage and employment taxes.
Income taxes consist of personal wage (as associated to wage from your business) and enterprise wage taxes.
Personal taxes, of course, need to be filed and paid by April 15th of each year. However, since nobody is withholding taxes for you (the enterprise owner), you are required to pay taxes as you go. You do this in the form of paying estimated taxes (Es), also known as paying quarterly or self-employment taxes.
These quarterly tax payments are due in January, April (yes, April 15th!), June and September (specific days vary from year to year). Make sure to mail in your cost along with a 1040-Es cost coupon.
Business taxes may be due at distinct times throughout the year, depending on exact state requirements. Washington State, for example, collects enterprise & work Tax and City Tax around the same time federal quarterly taxes are due. Our county collects enterprise asset taxes (such as exam tables, computers, etc) once per year.
Employment taxes consist of taxes you pay in part and secure on profit of your employees. These taxes consist of federal withholding, collective security, Medicare, unemployment and workers compensation. Employment taxes generally are a mix of federal and state withholdings.
Form 940, Employer's every year Federal Unemployment (Futa) Tax Return, is due in January of each year; it reports the amount of federal unemployment paid for employees.
Form 941, Employer's Federal Tax Return, is due quarterly and reports payroll taxes withheld for the quarter.
Keep in mind, that the above forms are often filed at distinct times than the actual tax payments!
By now your head should be spinning - I know mine is! The good news is that you can hire somebody great to do all of that for you. However, it is a good idea for any enterprise owner to know what needs to happen in this part of the business. Because remember, the ultimate responsibility for literal, and timely cost and filing rests with the enterprise owner - You!
Npbo™ performance Steps:
Set money aside throughout the year specifically for taxes. You do not want to be caught short. Compile a list of taxes due for your location and structure. List dates for filing, tax cost due dates. Consult with a great bookkeeper and tax specialist. Further facts and forms can be found at http://www.irs.gov
© 2011, Johanna Hofmann, Mba. All rights Reserved.
published here Np firm Tip: firm Taxes - An overview published here
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