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Business Tax Laws
there are several different types of taxes, and business tax is just one of them. Business tax will all depend on how the business is classified, be it an S Corporation, a Limited Liability Company, or a Sole Proprietorship. But how do business taxes affect these different types of businesses? Are the business tax expenses deductible for the business? Questions like these regarding business tax laws are answered below by the Experts.
What is business tax?
Business tax may also be known as company tax or corporation tax. This tax is based on the capital, income, may be imposed on types of legal entities and can range from city taxes all the way to
. The majority of countries impose business taxes on businesses within the country, on the income that was made in that county. Some countries impose business tax on all income of the businesses that are organized in that country. The company’s income is subjected to taxes in a similar manner to an individual’s income. For the most part a company’s net profits are subject to business tax.
If a business in the state of Michigan receives all their sales from overseas does the business have to file a Michigan Business Tax?
According to the United States tax law, any money that has been earned, even worldwide, has to be reported to the IRS on a
return if the corporation was formed in the United States. In regards to the Michigan Business Tax, a company is required to pay Michigan Business Tax only if the
received in Michigan are in excess of $350 thousand. If a company based in Michigan has no receipts received in the state of Michigan, then that business will not be required to pay Michigan Business Tax.
Are coupons and discounts tax deductible for a S Corporation business when filing business taxes?
The business would not deduct the cost of the coupons or discount. For business tax reporting purposes a business would only report the income received post coupon or discount. A coupon or discount, that have not been used are not deductible for the business, since the business did not incur any costs from coupons that were not turned in. An example would be a business offering a $100 off the purchase of a new set of tires, if one person comes in and purchases a set of tires that would normally cost $400, the business would only report the $300 made after the discount was redeemed.
When are business taxes deductible, the year the incurred or the year they are paid?
When business taxes are able to be used as
will depend upon what type of accounting method the business uses, cash or accrual. If a business is using the accounting method of cash then the business tax expense would be deducted in the year that the business tax expense was paid. If the business is using the accounting method of accrual, then the business tax expense would be deductable the year that the business tax was incurred. The cash method is the primary accounting method for many individuals and small businesses.
Business tax expenses are deductible, but when the
is to be made will depend on the business’s accounting method. Business tax law may at times be hard to understand, if a person doesn’t understand and may need Expert advice.
Recent Business Tax Questions
We own a small e-commerce business, were we operate somewhat
We own a small e-commerce business, were we operate somewhat like a middleman.
We are planning to incorporate as a LLC in the state of Wyoming, and be elected to be taxed as an S-Corp by the IRS.
We have two owners who own the business 50/50. We have customers order a SERVICE through our website, which we then will hand off the service to a person who is NOT employed by us.
We just middleman the service in which we will accept the money, let the customer interact with the provider of the service,
and then once the service is completed we will give the service provider the money, while we keep a percentage fee of what was paid by the customer.
All of our payments go through paypal.
One of us lives in Wisconsin, while the other lives in Illinois. What forms would we need to fill out for our state taxes and federal taxes?
How will these service providers be taxed, is it possible to not have them considered contractors as we are just a middleman service?
If we do have to consider them contractors, what do we need from them to file these taxes and what forms do we need to fill out total? Do we need to keep track of every payment, or just the sum total?
We are doing a one time auction moving out of country.
We are doing a one time auction for someone moving out of country. We are trying to determine if we need to charge a sales tax. It is in the State of Arizona. It is personal household effects at the residence of the owner. The sale also includes an automobile, a mobile home which is classifieds as personal property (like an automobile) in this state, and real property.
I think I may have a problem. One of my hobbies is photography.
I think I may have a problem. One of my hobbies is photography. Last year I got my FEIN, made a bunch of prints, bought a tent, display and did 3 weekend art fairs. I did about $8000 in sales and collected sales tax from my customers to turn in to the state. I bought TurboTax small business and home edition and did my taxes online about a week before they were due. A few weeks went by and I started to think about the tax software i used and how I saw no mention of sales tax through the TurboTax software. It was my impression that since it was a small business tax software program that it dealt with all the taxes involved with small business and through their calculations the sales tax was incorporated into their state tax section of the program. Well, I completed all the taxes and I ended up getting a refund from both state and federal. So since I got a state refund it made me think that it calculated in the sales tax and the amount I collected in sales taxes less than my refund so I ended up getting a refund and not "oweing" anything.
I started to get a bad feeling about it so I asked another photographer friend of mine that I met at the art fairs who also sells his photography. He said that the TurboTax small business will have nothing at all to do with sales tax and that I needed to do those separately on a completely different form. I went to the state of Michigan tax website and looked it up and apparently I needed to register for a state sales tax license and sales taxes for
2014 were due February 28.
Well, I did the form for my new sales tax license through the state and I now have that but I'm concerned about the sales tax that I collected from 2014. I did report the income from the art fairs on the 2014 state income tax. I guess I'm just looking for advice. I have the sales tax money and I want to pay the taxes (as was my intention when i started). What I want to know is the best way of going about this. I don't want this to blow up in my face but I want to be squared up and legal. What would be the best way of dealing with this? And what should I expect to hear from the state for not having a sales tax license and for being late with my sales tax payment..?
Thanks for your time.
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