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Kind of Business Tax that a Small Enterprise will Pay

A small enterprise is a business that is marked by a limited finance and material flow and a few employees if any. It can be a partnership, sole proprietor or a corporation that is privately owned. There is a form of tax for every business to pay. Business taxes can be a state, federal or a local tax. It is necessary for a business to comply with tax payment in order to avoid legal consequences. It is important for the business owner to be knowledgeable regarding the business tax. This will ensure that they know what taxes to pay for their type of business. Business taxes are dependent on employees, products or services, business property among other factors. Great legal impact can arise from these quick tricks of avoiding taxes. Types of business tax include the mentioned.

Businesses pay income tax. The profit that a business makes is what determines the income tax to be paid. Income tax is attracted by the business profit. The payment of this tax is dependent on the business type. The small business owners pay this tax by means of their personal income tax returns. Value added tax abbreviated as VAT is a tax that applies to products and services. Taxation is only applicable to goods and services that are eligible. some of the goods and services have tax exemptions and other have low VAT.

Property tax is a business tax that is levied on business property. The building that a business owns or any other real estate, property tax must be paid. The tax is paid usually to the local authority. The authority is usually the city or the county location of the real estate property. The tax amount to be paid is determined by the assessed value of the property. Another form of business tax is the self-employment tax. This tax is levied on the owner’s share of the income from the business. They are paid by the business owners for Medicare and for social security. This tax covers for retirement, hospital insurance and disability.

A business tax that is levied on the use and consumption is the excise taxes. this tax is incurred by the business owner on things that include fuel, transportation and also communication. Items like alcohol, tobacco produced or sold by a business will attract the excise tax. Business owners also incur a business tax known as employment tax. The earning of the employees to the business, is what attracts the employment tax. The business owner will pay this taxes based on the employees gross pay. The tax is deducted from the employee’s salary but paid by the employer.