The Types of Business Taxes that a Small Enterprise will Pay
A small enterprise can be defined as a business that has a limited finance, few employees if any and limited material flow. The small business is usually privately owned and can be a partnership, sole proprietor or a corporation. Every type of business is meant to pay a form of tax. Paid taxes by business can be state, federal or a local tax. It is necessary for a business to comply with tax payment in order to avoid legal consequences. It is important for the business owner to be knowledgeable regarding the business tax. Paying of the right type of tax that is dependent on their business will be ensured. Employees, products or services, business property, determine the business taxes. The impacts of these quick tricks of avoiding taxes can be legal. Business tax types are mentioned.
Businesses pay income tax. This is tax that is dependent on the profit that a business makes. This is because the profit realized attract the income tax. The type of business also determines the amount of tax paid. Through the personal income tax returns, the business owners pay this tax. Value added tax abbreviated as VAT is a tax that applies to products and services. Taxation is only applicable to goods and services that are eligible. some of the goods and services have tax exemptions and other have low VAT.
Tax levied on business property is the property tax. The building that a business owns or any other real estate, property tax must be paid. The local authority are usually the ones that the tax is paid to. The real estate property location will determine the local or county authority. The assessed value of the property is what determines the amount of tax that will be paid. Another form of business tax is the self-employment tax. The income from the business that the owner acquire, is the amount levied the tax. They are paid by the business owners for Medicare and for social security. The self-employment tax provides cover for retirement, hospital insurance and also disability.
A business tax that is levied on the use and consumption is the excise taxes. this tax is incurred by the business owner on things that include fuel, transportation and also communication. Items like alcohol, tobacco produced or sold by a business will attract the excise tax. Employment tax is also paid by business owners. The earning of the employees to the business, is what attracts the employment tax. The employment taxes that the business owner will pay is determined by the gross pay for the employees. Though the employee’s salary is where the taxes are deducted, it is the responsibility of the employer to pay the tax.