5 Taxes Small Business Owners Should Know About

Small Business Taxes for Beginners

As a small business owner, you’ve got loads of priorities, fires, and problems…

I know, because I’ve been there, walking in your shoes…

There is a never-ending list of tasks and responsibilities that all fall on your desk. “The buck stops with you.” as they say (I think that’s what they say!). 

All of these fires are really getting in the way of your growth and freedom:

• More money to do what you want
• More vacations (if you’re into that sorta thing)
• More square footage in a new home
• More $ to help your community
• More time to spend with your family
• More flexibility to come and go

These are all within your reach, and a lot closer than you may think. The truly tallest task, or million dollar question is knowing which levers to pull when…

What to focus on at what time will push you the furthest you ever want to go.

I know you want to go there.

I know you’re unsure which path is the right one for you at this moment in time…

…BUT

I know for a fact this lever I’m sharing with you is the lowest hanging fruit to help you get that much slower to your vision.

This is the part of your business you can easily put a little more effort in and get a major return on.

It’s most-likely your largest expense in your entire life…. TAXES.

You may have seen that coming, and here are the ones you need to know about to make sure you’re not getting blinded-sided and taken advantage of.

What are the taxes you as a small business owner need to know about?

INCOME TAX

Income tax is the first tax small business owners need to be aware of. It’s the big major one that you are most familiar with. Once a year you file a tax return for your business and your personal income. If you are unaware, this is the tax that as you are making income, a portion or that is required to go to Satan (oops...I mean the IRS).These income tax returns will cover your federal income tax and state income taxes. It’s not very simple how it’s calculated, but for now just look at it as a percentage of your income. 

Side note on this which a lot of people get mixed up about. You may get a request from your accountant to pay estimated individual quarterly taxes to help “prepay” some of that income tax.. 

We want to make sure that your income tax is as lowwwwwwwwwwww as possible. 

Here are some easy strategies that will help you lower your tax by $3, 000 - $5,000 without lifting a finger.

PROPERTY TAX & PERSONAL PROPERTY TAX

We’re familiar with if I own a house I pay property taxes and if I own a business property I pay property tax on that. What people don’t know is that you have to pay an additional tax called personal property tax for equipment you use within your business. 

Lame!

Another sneaky way for our friends over in Hell (oops… I mean Washington) to collect what is theirs. There is a solution with this. Ask your accountant if you need to file an exemption for the personal property tax for your business. Anything we can do to mitigate your tax burden is low hanging fruit to help you keep lots more of your money in your bank account.

SALES TAX

Sales tax is actually not your tax, but it is a tax you collect from your customers and pay on their behalf. 

So read between the lines here (which I hope you did too!)

You have the most wonderful privilege of doing FREE work for Lucifer (oops..I mean Uncle Sam) by collecting money for them and sending it off to them when they want it…

AND, if you don’t do it correctly on their behalf, you get penalized and have to pay the sales tax to the government yourself. Yikes, those guys really are pricks.

Understand the sales tax for your business area. It varies substantially and we don’t want you having any surprises. 

EMPLOYMENT TAX

If you have payroll, W2 Employees, at your business we strongly recommend that you hire a payroll company. Let me say that again, (read previous sentence again). 

This also includes you as the S-Corp owner. You are required to file payroll taxes each quarter so don’t skip this one thinking you don’t have employees. 

But with payroll, you do not want to do this yourself! Every client, and I usually don’t use all inclusive words, but EVERY company I know about that did their own payroll has made mistakes on their payroll filings that they are penalized for. And with payroll issues, I promise you they last forever… it’s like the “Never Ending Story" with Falkor being your enemy instead of your magic dragon. Use a payroll company!

The Banshees from Mordor, (oops…I mean the IRS) will hold you to these tax laws, whether you know the tax laws or not, so please find an accountant that can help you save money and ensure you make good profit first decisions moving forward. 

#IRSSucks

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John Briggs | Tax Genius

info@incitetax.com

801-999-8295

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