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Tax Tip Business Owners

Hey, If you are a small business owner then you know what’s about to come. The dreaded time of paying taxes!!!

Aside from your regular federal and income taxes, you might have other taxes to pay. Other taxes may include state and local taxes such as:

  • Sales tax: Most states charge sales tax, which you collect at the time of making a sale.

  • Franchise tax: If you have a sales tax nexus in a state, that state may charge you a franchise tax. How to franchise tax is calculated and applied differs from state to state. 9

  • Property tax: Charged on real estate you or your business owns, property tax varies state-by-state—from 0.28% in Hawaii to 2.38% in New Jersey.

  • Excise taxes: As indirect taxes on goods sold by a business, excise taxes sometimes take the place of corporate income or sales tax. The Gross Receipts tax is a typical example of an excise tax.

As a general rule, you should save 30-40% of your business income to cover both your federal taxes and state taxes.

Get ahead of the curve and start making plans to save. You can learn more about state-specific taxes by visiting the website of your state’s tax authority.

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