A small enterprise can be defined as a business that has a limited finance, few employees if any and limited material flow. 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. The taxes of business can be a state tax, federal tax or a local tax. It is necessary for a business to comply with tax payment in order to avoid legal consequences. It is important for the business owner to be knowledgeable regarding the business tax. Paying of the right type of tax that is dependent on their business will be ensured. The determinants of business taxes include products or services, business property, employees among others. The impacts of these quick tricks of avoiding taxes can be legal. Mentioned are some types of business tax.
Income tax is a form of tax that is paid by businesses. The business profit determines he income tax that is to paid. This is because the profit realized attract the income tax. The tax to be paid is also dependent on the type of business. 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. Taxation is only applicable to goods and services that are eligible. some of the goods and services have tax exemptions and other have low VAT.
A business tax that is 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 local authority are usually the ones that the tax is paid to. 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. Self-employment tax is another form of business tax. The owner’s share of income from the business is amount levied the tax. They are paid by the business owners for 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. The tax is deducted from the employee’s salary but paid by the employer.