All About Various Types of Business Taxes – Doing business in the United States will require you to file various types of business taxes. Depending on the type of business, your earnings, and how your business operates, there are several taxes you need to report to the government once a year. The tax payments will also differ depending on the type of business taxes you have.
You might need to pay for your business taxes with a pay-as-you-go payment model, annual payment model, or any other type of payment model. It is important for businesses to determine the type of taxes that are suitable for their business operations, so that you don’t need to face some tax problems later on. What is sales tax nexus? It is the sales tax businesses need to pay when they are selling products in other states, provided that they have reached a certain threshold.
There are 5 different primary business tax types in the United States. Here they are:
1. Self-Employment Tax
Self-Employment tax is the business tax for self-employed individuals, meaning those who work for themselves with no employment to any company. These are the individuals that have their own business and don’t employ other people to work for them. The tax payment for the Self-Employment tax will include the coverage for various benefits they can receive, such as retirement benefits, hospital insurance, and so on.
2. Excise Tax
Excise tax is the type of business tax applied to certain goods produced or manufactured in the United States. This tax will apply even before the products are getting sold to customers. However, the excise tax can include the tax for sales of certain products or equipment, and there are many categories of products that the government can impose excise tax on. Excise tax can also extend to certain service payments.
3. Income Tax
Income tax is the type of business tax that any business needs to file based on their income. It also applies to individuals. Among the various taxes that businesses need to pay, income tax is perhaps the most common one. You need to pay the income tax to the government every year, determined by the income you receive for a full year. However, businesses might need to pay for income tax in a pay-as-you-go model, meaning they need to pay the tax as soon as they receive it.
4. Employment Tax
For businesses that employ other people to work in their companies, employment tax is one tax they need to file to the government. The employment tax will include various aspects that will cover various tax responsibilities of the employees, such as social security tax, medical tax, FUTA tax, and so on.
5. Estimated Tax
Estimated tax is the type of business tax you need to pay based on the estimated income you might receive during the year. Depending on the income you will receive, you will need to pay the estimated tax for that. This tax is important if you don’t know how much you will receive during the year, so you can make an estimate of your income and pay the taxes based on that calculation.
These are the different business taxes that businesses in the United States need to pay to the government. Not all businesses will pay all these taxes. Depending on the type of business you have, you might only need to pay for some of these taxes. However, it is your responsibility to file the tax report and pay for them every year.