Kind of Business Tax that a Small Enterprise will Pay
A business that is marked by a limited finance, material flow and few employees if any is called a small enterprise. 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. To avoid legal issues, a business to pay tax as required. It is important for the business owner to be knowledgeable regarding the business tax. This knowledge will assist them in paying of tax depending on their business. Employees, products or services, business property, determine the business taxes. Great legal impact can arise from these quick tricks of avoiding taxes. Business tax types are mentioned.
A form of tax paid by businesses is the income tax. The profit that a business makes is what determines the income tax to be paid. This is because the profit realized attract the income tax. The tax to be paid is also dependent on the type of business. The tax is paid by means of personal income tax returns by the business owner. 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. This is because some products and services are tax exempted and others have lower VAT.
A business tax that is 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 tax is paid usually to the local authority. 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. The business owners pay them for Medicare and for social security. Cover for retirement, hospital insurance and disability are provided by the self-employment tax.
A business tax that is levied on the use and consumption is the excise taxes. The business owner incurs this tax on things like fuel, transportation and also communication. Items like alcohol, tobacco produced or sold by a business will attract the excise tax. Another type of business tax that business owners incur, is the employment tax. It is usually paid on the earnings of an employee of the business. The employment taxes that the business owner will pay is determined by the gross pay for the employees. The tax is deducted from the employee’s salary but paid by the employer.