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Types of Business Taxes

types of taxes

Types of Business Taxes

You have probably heard the saying, “There are only two things that are constant in life, death and taxes.” Taxes are a part of life, and to avoid legal trouble, it is best to be aware of the what, how and when of each tax.

The type of business you have determines which taxes you pay and how you pay them, but in general there are 5 different types of business taxes.

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Should You Incorporate? Tax Advantages of being an "S" Corp

incorporate

Should You Incorporate? Tax Advantages of being an “S” Corp

First of all, CONGRATULATIONS and WELCOME to the Business World!  So you need to decide which business entity is right for your business.  There are five basic business structures……Sole Proprietorship, Limited Liability Company, Cooperative, C Corporation, Partnership, and the “S” Corp which we will cover here. Should you incorporate?  Let’s look at an S Corp’s definition and tax advantages.

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Do you need to set up Sales Tax for Your Business?

sales tax

Do you need to set up Sales Tax for Your Business?

Whether or not you collect sales tax rests on one question: Do you have a physical presence in a state?

If you have a physical presence in a state, which includes a store, an office, or a warehouse, you collect sales tax in that state. However, if you do not have a physical presence in a state, you do not need to collect sales tax in that state.

This general guideline for collecting sales tax actually stems from a 1992 Supreme Court ruling that states that mail-order businesses cannot be required to collect sales taxes unless they have a physical presence in a state. In today’s market, this president has also spilled over to cover online retailers as well.

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Who Knew Hiring Your Kids Could Save you Money

Hiring

Who Knew Hiring Your Kids Could Save you Money

Did you know that if you own a family business you can hire your minor children and potentially save money on your taxes?

First let’s look at the requirements…..Your children who are under age 18 can work for your business as long as the work is essential to your business, their age and work performed is within their abilities and their pay is reasonable.

  • Essential work…..might include stuffing envelopes, filing, handing out fliers, data entry….etc.  Non-essential work is just that….not important to running your business such as….taking out the trash, dusting or vacuuming your office space.
  • Your child must possess the ability to perform the work they are being paid for.  Can your 4 year old child handle data entry, probably not, even though they may kick your butt at video games….but your teenagers would have the abilities to perform most of your office work that you may need.
  • Reasonable pay…..the wages earned by your child for work performed must make sense.  Let’s use the data entry example….paying your child $35 per hour to enter client information into your business computer would not be reasonable when the average pay for data entry is $11-$13 per hour.

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