Uncle Sam's Fair Share - Your Business Opportunity Taxes
A Home Business Article Contributed by Sharon Hill
Paying Your Business Opportunity Taxes
While there are variations by U.S. state, there are some general points you need to know to keep your business opportunity out of the tax dog house.
They are: You do not need an employer ID number (also referred to as Tax ID number) if you are a sole proprietor with no employees, excise taxes or pension plans. You can use your social security number for identification. All others must request this EIN from the IRS. It can be done from their site or by phone, and is almost instantaneous.
While tax forms and procedures vary according to whether you are a sole proprietorship, partnership or corporation, in general you will need to pay your federal income taxes each quarter. This won't become necessary, however, until the first fiscal year after the year you claim a gain rather than a loss on your business opportunity.
Self-employment tax is your means of paying into your social security and Medicare account. It also must be paid quarterly once you have reported net income of $400 or more.
Your state taxes vary considerably from state to state. Let's look at a few. North Carolina, for instance, imposes a corporation franchise tax; for LLC there is a state-mandated yearly $200 reporting fee. Partnerships are not taxed, nor are sole proprietors - except as individuals. Indiana only charges corporations and LLCs $30 )or $20 if done online)for its biennially required reporting, and, just like North Carolina, does not tax partnerships or sole proprietorships except as individuals.
Employment Taxes for Your Business Opportunity
If you have employees working for you, you must pay employment taxes. These taxes include social security and medicare tax, federal unemployment tax (FUTA) and federal income tax withholding. You only pay these, however, for employees. Not for independent contractors. For independent contractors you only need to provide a year-end 1099 form, one copy of which goes to the contractor, stating the total monies paid by your business opportunity firm to the contractor.
If, however, your business opportunity firm has not paid $600 or more to the contractor in the current year you are not obligated to report via 1099 form at all.
Who's an Employee of Your Business Opportunity Firm?
Your business opportunity has employees, rather than contractors, if these folks's work-related actions are controlled by you. In other words, if you not only have the right to control the result of the work they do for you, but also have the right to control the methods and means they use in accomplishing that work, they are your business opportunity firm's employees - they are not independent contractors.
Business Opportunity Excise Taxes Explained
Excise taxes are most commonly levied on fuel - if you have a trucking company you pay excise taxes. Some other excise-taxable products are luxury vehicles, and use of international air travel facilities.
The best source of information on your taxes is your government - good old Uncle Sam, as well as your state, county and municipal offices. All information and assistance is free of charge. All documents are downloadable from the federal IRS site as well.
