How Much Tax Does a Small Business Pay? | A Guide to Being Tax Savvy

If you want your small business to keep growing and staying effective, you will need to get a handle on how you file and pay your taxes.

The way you tackle your taxes will be the difference between success and failure, so spare no expense or effort when it comes to addressing them.

But how much tax does a small business pay?

Read on to learn more about these taxes, how much you can expect to pay, and how you can do them correctly.

Understand What Types of Taxes You are Subject To

The first thing you need to do is figure out what kind of taxes your company will be subject to.

Small businesses might be subject to a number of different taxes — to include capital gains tax, state business tax, corporate tax, and payroll tax.

Each tax type has its own rate and stipulations, so the more you learn about it, the better. By getting clear on exactly what type of taxes you will pay, you’ll be better able to stay organized and pay these taxes in full.

How Much Tax Does a Small Business Pay?

It’s also important for you to learn exactly how much money you will pay for your small business tax.

The types of taxes you pay depend on the type of small business that you operate. Check on these individual tax rates, since they change from year to year.

For instance, you might pay one rate for your company’s property tax and another for your payroll tax.

Handle Your Small Business Taxes Effectively

Since you can see the importance of handling your taxes, make sure you take the appropriate steps below:

1. Hire a Tax Professional

Without question, the best way to address your taxes is by hiring someone who does it for a living.

Something as small as hiring a bookkeeping and accounting professional can help you stay on top of your taxes more effectively.

Look into their specialty and pedigree, check with your state’s certified public accountant (CPA) organizations, and look these professionals up in the Better Business Bureau (BBB) so that you know they have your interests in mind.

2. Keep Your Records To The Best of Your Ability

When you can manage your financial records with impeccability, you will also be able to handle your taxes.

This is easier than ever today because you have so much technology that can help you keep receipts and documentation for each and every transaction. Since so much of this is now stored digitally, you can quickly mull through records for specific dates — even years ago.

Be sure that you make your recordkeeping process as thorough as possible so that it is easy to update and alter.

3. Keep Yourself Aware of Different Tax Changes

Since tax changes happen year by year, you need to stay abreast of them as they come along.

When your company is aware of these changes, you will have the chance to address them accordingly and make sure that you are prepared to pay what you owe. Having a tax professional available will allow you to move with the ebb and flow of the changes.

4. Lower Your Tax Debt Through Some Quality Write-Offs

One of the best ways to grow your business is through the help of some write-offs.

Some of the most important write-offs that you need to know for your business include write-offs for company vehicles, office property, property depreciation, and general business expenses. The more you know about these write-offs, the easier time you will have to reduce your tax bill.

5. Always Pay Estimated Tax

You can get a handle on your taxes when you decide to pay quarterly taxes.

With quarterly taxes, you pay an estimated amount ahead of time, so that you don’t have to wait until the tax deadline to pay a larger bill. The more organized you get about your estimated taxes, the less stress you will have when handling your taxes as a whole.

6. Constantly Revisit Your Business Designation

Your business designation is one of the most critical variables you need to know about when you are handling your taxes.

For instance, you might have a different rate and different implications when running a General Partnership (GP) as opposed to a Limited Liability Company (LLC) or a Sole Proprietorship.

At the end of each tax year, make sure that you revisit how your company operates and what you need to know about tax issues with your business. This will help your company stay current and more effective.

7. Make Use of the Best Software and Other Tools

It definitely takes some time to research the best tax software and tools on the market.

When you have software that keeps your tax info more current and thorough, you will be in a great position to manage your company’s finance. Test out a few of these tools until you find out which software makes you the most comfortable.

Get the Tax Help That Your Business Needs

So how much tax does a small business pay?

Now that you understand the answers to this and other questions, be sure you take the next step toward handling your taxes.

By considering these variables, you will put your small business in the best position to succeed. The better you stay on top of these issues, the easier your tax season will be and the less likely you are to deal with late payment penalties and audits.

We would be glad to help your business with any tax needs that you have.

Take the time out to contact us when you need help with your finance and tax needs.