The form of business you operate determines
what taxes you must pay and how you pay them. The
following are the four general types of business
taxes.
- Income Tax
- Self-Employment Tax
- Employment Taxes
- Excise Tax
Income Tax
All business except partnerships must file an
annual income tax return. Partnerships file
an information return. The form you use
depends on how your business is organized.
The federal income tax is a pay-as-you-go
tax. You must pay the tax as you earn or
receive income during the year. An employee
usually has income tax withheld from his or her
pay. If you do no pay your tax through
withholding, or do not pay enough tax that way,
you might have to pay estimated tax. If you
are not required to make estimated tax payments,
you may pay any tax due when you file your
return. .
Self-Employment Tax
Self-employment tax (SE tax) is a social
security and Medicare tax primarily for
individuals who work for themselves. Your
payments of SE tax contribute to your coverage
under the social security system. Social
security coverage provides you with retirement
benefits, disability benefits, survivor benefits,
and hospital insurance (Medicare) benefits.
You must pay SE tax and file Schedule SE if
either of the following applies.
- Your net earnings from self-employment
were $400 or more.
- You had church employee income of $108.28
or more.
Employment Taxes
When you have employees you as the
employer have certain employment tax
responsibilities that you must pay and forms
you must file. Employment taxes include the
following:
- Social security and Medicare taxes
- Federal income tax withholding
- Federal unemployment (FUTA) tax
Excise Tax
Excise taxes are taxes paid when purchases are
made on a specific good, such as gasoline.
Excise taxes are often included in the price of
the product. There are also excise taxes on
activities, such as on wagering or on highway
usage by trucks. Excise Tax has several general
excise tax programs. One of the major
components of the excise program is motor
fuel.
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