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. A partnership, sole proprietor or a corporation that is privately owned qualifies to be a small business. Payment of tax is made by every business, because there is always a form of tax in business. Paid taxes by business can be state, federal 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 will ensure that they know what taxes to pay for their type of business. Business taxes are dependent on employees, products or services, business property among other factors. Great legal impact can arise from these quick tricks of avoiding taxes. Types of business tax include the 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. Income tax is attracted by the business profit. The payment of this tax is dependent on the business type. 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. Low VAT and tax exemption will cause some goods and services from being taxed.
A business tax that is levied on business property is the property tax. For every building or real estate that is owned by the business, the owner must pay property tax. This type of tax is normally paid 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. Self-employment tax is another form of business 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.
Excise tax is levied on the use and consumption, and it is a form of business tax. Things like fuel, transportation and also communication are what the business owner is taxed the excise tax. The production or the sale of items like alcohol or tobacco, attracts the levying of 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.