What You Need to Know about Federal Taxes

Important Facts You Need to Know about Federal Taxes

 As a business owner, it is important that you understand the differences between state and federal taxes. Certain tax obligations are due to your state, and these payments vary depending on the location where you live. On the other hand, federal tax obligations are consistent across the nation.

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Many small business owners agree that taxes are a big burden in managing their business. Here at Easier Accounting, we want to simplify the tax process and help you understand the important aspects. These are a few things that you should understand about federal income tax:

Quarterly Tax Payments

Even though most people wait until April 15th to do their taxes, small business owners have more tax deadlines that shouldn’t be overlooked. In most situations, you are required to make quarterly tax payments that are credited to your anticipated tax return for the year.

Your accountant can help you calculate these payments, to help you estimate the amount of money that will need to be paid to the federal government. If you miss these quarterly tax payments, then it is possible that you might have to pay a penalty to the federal government.

Tax Deductions Add Up

It can be a hassle to track all of the tax deductions for your business. Don’t view it as a burden, though, because these deductions can add up over time. If you are missing common tax deductions, then it means that you are likely paying more federal income tax than you need to pay.

The best solution is to work with an experienced accounting team to learn more about the tax deductions that apply to your business. Properly tracking these expenses will help you so that you are prepared for tax season.

Business Entity Impacts Tax Obligation

What type of business entity do you have? The type of entity will impact the taxes that you are paying, so it is essential that you talk with a tax professional to choose the entity that best matches your individual needs. Common options include sole proprietorship, partnership, S corporation, INC, and LLC.

These terms refer to the legal way your business is structured. Even though this might seem like a small decision in the beginning, it has a direct impact on the way the federal government will charge income tax.

Hire a Tax Professional to Help

Most small business owners don’t know the nuances of federal and state tax law. Instead of trying to figure it out on your own, it is better to talk with a professional who can help you sort through the rules.

Contact our team at Easier Accounting for more information about tax services that can help your small business: (888) 620-0770

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