It’s essential to understand what kinds of taxes you must pay for your small business. These are the types of taxes categorized by agencies that you pay while you run a business.
Federal Taxes (The IRS collects the following taxes)
– Income taxes
– Self-employment taxes for the Social Security and Medicare
– Employment taxes (payroll taxes): when you have employees, you, as an employer, are required to pay and/or withhold employment taxes on behalf of your employees.
State Taxes
– Income taxes
– Employment taxes (payroll taxes)
– Sales taxes on retail goods: you, as a seller, collect the taxes from your customer and pay to the state.
– Excise taxes: some states collect taxes on certain kinds of business operations or activities such as alcohol or cigarette manufacture or distribution
– LLC, corporation or Limited Partnership taxes: Some states collect taxes on LLC, corporation or Limited Partnerships.
County & City Taxes / Fees
– Most cities or counties collect taxes by certain criteria such as gross payroll or receipts.
– Property taxes: counties impose taxes on real estate or personal property owned by business.
– Business license fee or tax registration fee: some cities and/or counties may require you to register your business and pay a registration fee.
– Business permit fee: if your business is engaged in regulated business activities such as selling alcohol, you’re require to acquire a permit for it.