For most people, taxes are a big deal in the first part of the year when all the W2s and bank statements start flooding the mailbox. Tax forms are completed and filed, refunds are paid and sometimes checks are written to the IRS. Then the whole thing is forgotten for another year. That’s usually the way personal taxes are handled, but not those of business owners and managers. In business, tax issues are constant.
Here are some taxes and considerations most business face:
- Tax deductions and credits. It’s everyone’s responsibility to pay their fair share, but no one wants to pay more than they are legally required. The Internal Revenue Service (IRS) gives businesses various tax breaks on things like capital improvements, land purchases and business use of vehicles. Local and state governments may also give an abatement on property or earnings taxes in exchange for meeting certain criteria, such as establishing and maintaining an agreed-upon employment level.
- Inventory taxes. Many jurisdictions tax a company’s inventory. Detailed records are required.
- Withholding. Regulations require withholding from employees’ pay for Social Security, Medicare, unemployment and federal and state taxes. The business is also required to match certain employee taxes, such as Social Security. Most employees also owe a local earnings tax, so that amount has to be withheld as well. An IRS form 1099 must be sent to every vendor and contractor who has been paid $600 or more during the previous calendar year.
Keeping up with it all is a full-time job in itself. Don’t struggle with it. Payroll Offices of America can handle all your tax needs so you can focus on other things. Call us or visit us here today to get started.