Everything You Need to Know About Small Business Taxes in 15 Minutes |

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Everything You Need to Know About Small Business Taxes in 15 Minutes

Taxes

 
As an online or small business owner, taxes are likely one of those things that you’d rather not think about unless you absolutely have to. While taxes aren’t necessarily “fun,” they don’t need to be painful either. In this post, I’ll give you a quick overview of everything you need to be aware of when it comes to small business taxes. This will help you greatly if you’re new to business or if you feel like you’re missing something when it comes to taxes in your business. 

I discussed everything in the video above, but here’s an outline for your reference: 

1. How Taxes Work as a Small Business

Sole Proprietorship, LLC, Partnership or S Corporation: 

  • Profits & losses from the business “roll up” and are reported on your individual tax return 
  • The entity does NOT pay taxes itself 
  • Multi-member LLC, Partnership, or S Corporation: file an information return 

C Corporation: 

  • Taxed at the entity level 
  • Files its own tax return 

2. Types of Taxes 

  • Income Tax 
  • Self-Employment Tax 
  • Payroll Tax 
  • Sales Tax 
  • Excise Tax 
  • Property Tax 

3. Estimated Tax Payments 

  • Required for income and self-employment tax if total tax liability for the year is $1,000+ 
  • Due April 15, June 15, September 15, and January 15 
  • Amount based on estimated tax liability for the year 
  • Safe Harbor Rules – 100% (110%) of prior year liability or 90% of current year liability 
  • No penalties if you owe less than $1,000 

4. Tips for Tax Time 

  • Set up an accounting system and keep it organized 
  • Keep good documentation for your small business taxes 
  • Set aside time to do your quarterly tax calculations 
  • Set up a separate bank account for your tax savings 

5. Make a Tax Plan 

  • Decide if you are going to DIY or hire a tax preparer 
  • Don’t wait until the last minute to find someone to help you with small business taxes 
  • Put all important deadlines in your calendar 
  • Block off time in advance to gather documents, prepare calculations, review returns 

Need advice on how to manage your biz money better this year? Check out this post about how to save more and stress less in your business. 

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