Navigating the world of taxes as a small business owner can be complex. At Fred Lundin CPA, we're here to help you understand your obligations and ensure you remain compliant. Here's a breakdown of the common taxes you'll likely encounter in the USA:
Federal Taxes:
- Income Tax: This applies to all businesses, regardless of structure.
- Sole Proprietorship/Partnership: You'll report your business profits on your personal income tax return (Form 1040) using Schedule C.
- LLC: Depending on how your LLC is taxed (as a sole proprietorship, partnership, or corporation), you'll report profits accordingly.
- Corporation: Corporations file their own income tax return (Form 1120).
- Self-Employment Tax: If you're self-employed (sole proprietor, independent contractor, or member of a partnership), you'll need to pay self-employment tax, which covers Social Security and Medicare. This is calculated on Schedule SE of your Form 1040.
- Estimated Taxes: If you anticipate owing $1,000 or more in taxes, you'll likely need to pay estimated taxes quarterly throughout the year using Form 1040-ES. This helps avoid a large tax bill at year-end.
- Employment Taxes: If you have employees, you'll be responsible for:
- Withholding federal income tax, Social Security, and Medicare taxes from employee wages.
- Paying your share of Social Security and Medicare taxes.
- Paying federal unemployment tax (FUTA).
- Excise Taxes: These apply to specific goods, services, or activities, such as alcohol, tobacco, fuel, or transportation. Whether you owe excise taxes depends on your industry and business activities.
State and Local Taxes:
- State Income Tax: Most states have an income tax, with varying rules and rates. You'll need to check with your state's tax agency for specific requirements.
- Sales Tax: If you sell taxable goods or services, you'll generally need to collect sales tax from customers and remit it to your state. Rates and rules vary by state and even locality.
- Property Tax: If your business owns real estate or personal property used in the business, you may owe property taxes.
- Other State and Local Taxes: Depending on your location and industry, you might encounter other taxes, such as:
- Franchise Tax: A tax on the privilege of doing business in the state.
- Gross Receipts Tax: A tax on your business's gross revenue.
- Unemployment Tax: Most states require employers to pay state unemployment taxes.
How Fred Lundin CPA Can Help:
- Tax Planning and Preparation: We can help you understand your tax obligations, develop tax planning strategies, and accurately prepare and file your tax returns.
- Compliance: We'll ensure you meet all tax deadlines and comply with relevant regulations.
- Minimizing Tax Liability: We can help you identify potential deductions and credits to legally minimize your tax burden.
- Answering Your Questions: We're here to answer your tax-related questions and provide ongoing support.
Remember:
- Tax laws are complex and subject to change. Stay informed and consult with us if you have questions.
- Maintain meticulous records. Good record-keeping is crucial for tax compliance.
- Don't hesitate to reach out. We're here to help you navigate the complexities of small business taxes.
By understanding your tax obligations and working with Fred Lundin CPA, you can ensure compliance and focus on what you do best – running your business.
