Business Tax Filings

September 9, 2011

Like the old adage goes, the only things that are certain in life are death and taxes.  Understandably, the mere thought of filing business taxes makes many people scramble towards the nearest bottle of Tums!  But, as a business owner, it is your job to ensure that returns are filed accurately and on time.

It is important that you are aware of your tax obligations regardless of the type of business formation you have. This includes having a good understanding of the tax filing process and thorough record-keeping.  In fact, the first rule of business taxes is making sure that you have an effective and efficient system for recording your business’ financial transactions and keeping supporting financial documentation (W-2 forms, statements, sales slips, paid bills, invoices, receipts). These documents are critical as they support the entries in your accounting records and on your tax return.

Income Tax

All businesses except partnerships must file an annual income tax return.  Partnerships file an information return.  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 not 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 is a social security and Medicare tax primarily for individuals who work for themselves.  Your payments of this tax contribute to your coverage under the social security system.  Generally, you must pay SE tax and file Schedule SE (Form 1040) if your net earnings from self-employment were $400 or more and/or if you work for a church or a qualified church-controlled organization (other than as a minister or member of a religious order) that elected an exemption from social security and Medicare taxes, you are subject to SE tax if you receive $108.28 or more in wages from the church or organization.

Employment Taxes

When you have employees, you as the employer have certain employment tax responsibilities that you must pay and forms that must be filed.  Employment taxes include Social security and Medicare taxes, Federal income tax withholding, and Federal unemployment (FUTA) tax.

Excise Tax

Excise taxes consist of several broad categories of taxes, including, environmental, communications, air transportation and fuel taxes, tax on the first retail sale of heavy trucks, trailers, and tractors and manufacturers’ taxes on the sale or use of a variety of different articles.  There is also a federal excise tax on trucks, truck tractors, and buses having a taxable gross weight of 55,000 pounds or more that are used on public highways.  If your business includes accepting wagers or conducting a wagering pool or lottery, you may be liable for the federal excise tax on wagering.   Excise taxes are reported on a number of tax forms depending on the type of tax being paid.  The IRS provides a complete list of Excise Tax Forms.

Although accounting and tax preparation are rarely exciting for small business owners, understanding what they entail and being prepared can make them a little stressful for everyone involved.  At Wallace & Associates, our experience and expertise allow us to accurately and efficiently prepare returns for various types of entities including individuals, corporations, LLCs, partnerships, trusts, estates, and not-for-profit organizations. Regardless if you only have a W-2 or if you need to file a complex internal taxation report, we are happy to help you file!

Dong business tax filling right saves you money!

If your business needs help with taxation get in touch wit us. Wallace & Associates is a CPA taxation and accounting agency in the Los Angeles area.
We are currently providing services for the following areas: Los Angeles, Beverly Hills, Malibu, Century City, Sherman Oaks, Calabasas, Santa Monica, Encino , Studio City, Hollywood , Pasadena