In today’s society, business owners have to worry about other things than just filing personal income taxes. They also have to pay their share of taxes on the company’s behalf as well, particularly if they are self-employed or in charge of financials for their own entrepreneurial efforts. For those just starting in their own entrepreneurial efforts the idea of business taxes can be intimidating. In general, however, there are four types of company taxes that employers are responsible for handling.
Self-employment – This type of tax is designed for those who have Medicare and Social Security as a main source of income. People who work for themselves will also file this type of tax.
Income – Every business has to pay taxes just like individuals do. These are gathered by withholding taxes from employees throughout the calendar year whenever money is earned. When a business fails to pay the right amount, the IRS will make the business pay estimated income taxes and that is not something that a company wants.
Excise – This type of tax is bestowed on companies that use, manufacture or sell services or products that may require taxing. In most cases, these taxes are included in the price paid by the consumer.
Employment – These are paid by business owners on behalf of the employees. Medicare, Federal Unemployment Tax, Social Security and Federal Income Tax are the different kinds of employment tax. As it stands right now, employers are required to withhold a certain amount of payroll tax from their employees’ paychecks and send those monies into the federal and state governments.
There are instances where employers will neglect paying the right amount for all their employees. This usually results in a significant amount of back taxes that is pushed back onto the employee. If you are a business owner and you feel that there are discrepancies between amounts that should or shouldn’t have been withheld, seeking tax relief could help resolve any possible debt involved. Staying on top of paying your business finances will keep your business afloat, the IRS happy and your employees even happier.
If you are a business owner and you find yourself at risk of not being able to pay federal or state taxes, you should seek tax relief through tax professionals about installment agreements, collection procedures, penalties and other tax issues. Tax experts can not only help your business navigate the murky waters of business tax law but they can also help you and your company get the tax relief it needs and deserves. Scammahorn Law Firm, PC, a tax law firm in Plano, Texas, provides the highest level of Accounting and Tax Preparation expertise and access to the latest technologies.