Taxes, Profits, Losses
What taxes will I have to pay on my small business?
Federal and possibly state income taxes must be paid on business net income. Compensation received by owners for services rendered such as salaries, are subject to both federal income tax and social security tax.
When do I have to pay taxes?
Payroll withholding taxes should be deposited to the government's account each time payroll is issued or at least monthly. Taxes on business and personal income are usually required to be paid quarterly.
Do I have to file a tax return if I had a loss?
Generally, businesses are required to file tax returns regardless of profit or loss. Returns are ordinarily due March 15th.
Is there a simple way to organize my paperwork?
Most important, is to keep personal and business records separate including checking accounts. It is advisable to keep records in an easily accessible location with similar items grouped together. Transactions should be reported consistently and financial statements prepared monthly. Software packages are available to facilitate efficiency with bookkeeping and accounting functions.
Do I need to hire an accountant, I'm just getting started?
Probably not for on-going record keeping. Tax return filing may require professional expertise such as an accountant specializing in small business.
What expenses can I ‘write-off' to the business?
Reasonable and normal expenses is the standard used by the IRS in assessing legitimate business write-offs. Expenses which appear to be personal are most susceptible to denial. Significant overstatement of deductions can result in interest and penalties. Incurring an expense simply because it is deductible is not a wise business decision.
SBDC @ Palm Beach State
3000 Saint Lucie Ave. Ste AD408
Boca Raton, Fl 33431
t 561.862.4726 | f 561.862.4727
© 2009 Small Business Development Center at Palm Beach State College
t 561.862.4726 f 561.862.4727 | sbdc@palmbeachstate.edu
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