The Types of Business Taxes 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. It can be a partnership, sole proprietor or a corporation that is privately owned. Payment of tax is made by every business, because there is always a form of tax in business. The taxes of business can be a state tax, federal tax or a local tax. Compliance with tax payment by a business, will help them avoid any legal consequences. The business owner ought to know about the business tax. This knowledge will assist them in paying of tax depending on their business. The determinants of business taxes include products or services, business property, employees among others. These quick tricks of avoiding taxes can have great legal impacts. Business tax types are mentioned.
Businesses pay income tax. This is tax that is dependent on the profit that a business makes. The profit generated by the business attracts the income tax. The payment of this tax is dependent on the business type. Through the personal income tax returns, the business owners pay this tax. A tax that is applicable to products and services is the value added tax, which is abbreviated as VAT. Only eligible goods and services are levied this tax. Low VAT and tax exemption will cause some goods and services from being taxed.
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. This type of tax is normally paid to the local authority. The real estate property location will determine the local or county authority. Amount of the tax to be paid is dependent on the assessed value of the property. 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 benefits of this tax to the owners is 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. Things like fuel, transportation and also communication are what the business owner is taxed the excise tax. Items like alcohol, tobacco produced or sold by a business will attract the excise tax. Employment tax is also paid by business owners. The employment tax is levied on the business employee’s earnings. The employee’s gross pay, is what will determine the employment tax that the business owner will pay. It is the responsibility of the employer to pay this taxes though they are deducted from the employee’s salary.