The Types of Business Taxes that a Small Enterprise will Pay
A small enterprise is a business that is marked by a limited finance and material flow and a few employees if any. 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. The taxes of business can be a state tax, federal tax or a local tax. To avoid legal issues, a business to pay tax as required. Knowledge on the business tax is important for the business owner. Paying of the right type of tax that is dependent on their business will be ensured. Employees, products or services, business property, determine the business taxes. The impacts of these quick tricks of avoiding taxes can be legal. Mentioned are some types of business tax.
A form of tax paid by businesses is the income tax. This is tax that is dependent on the profit that a business makes. This is because the profit realized attract the income tax. 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. VAT is an abbreviation of value added tax that applies to the products and services. This is only charged on products and services that are eligible for taxation. some of the goods and services have tax exemptions and other have low VAT.
Tax levied on business property is the property tax. Property tax is usually paid for any building or a real estate owned by the business. The tax is paid usually to the local authority. The authority is usually the city or the county location of the real estate property. 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. This tax is levied on the owner’s share of the income from the business. They are paid by the business owners for Medicare and for social security. This tax covers for retirement, hospital insurance and disability.
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. A business that is in line with production and sale of items like alcohol, tobacco will require to pay 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 business owner will pay this taxes based on the employees gross pay. Though the employee’s salary is where the taxes are deducted, it is the responsibility of the employer to pay the tax.