One key to having a successful business is based on an understanding of your tax obligation. Metro Accounting And Tax Services has compiled the following tip to help you in the process. When you start a business, you need to know about income taxes, payroll taxes and much more. Here are five tax tips that can help you get your business off to a good start:
1. Business Structure. An early choice you need to make is to decide on the type of business structure you want to establish. The most common types are sole proprietor, partnership and corporation. The type of business you choose will determine which tax forms you have to file.
2. Business Taxes. There are four general types of taxes your business might face. They are income tax, self-employment tax, employment tax and excise tax. In most cases, the types of tax your business pays depends on the type of business structure you set up. You may need to make estimated quarterly tax payments.
3. Employer Identification Number (EIN). Similar to a social security number for individuals, you may need to get a social security number for your business, this is called an EIN and it is for federal tax purposes.
4. Accounting Method. An accounting method must be decided on as this is the set of rules that you use to determine when to report income and expenses. You must use a consistent method. The two that are most common are the cash and accrual methods. Under the cash method, you normally report income and deduct expenses in the year that you receive or pay them. Under the accrual method, you generally report income and deduct expenses in the year that you earn or incur them. This is true even if you get the income or pay the expense in a later year.
5. Employee Health Care. If you employ fewer than 25 employees you might be eligible for The Small Business Health Care Tax Credit. This is a credit that helps small businesses and tax-exempt organizations pay for health care coverage they offer their employees. You’re eligible for the credit if you have fewer than 25 employees who work full-time, or a combination of full-time and part-time. The maximum credit is 50 percent of premiums paid for small business employers and 35 percent of premiums paid for small tax-exempt employers, such as charities.
For help in starting your business on the right note let the experts at Metro Accounting And Tax Services guide you through the process. Call the office at 407-240-5143
User | 17/10/2017