Federal Taxes on Business

There are a number of taxes that are imposed upon business owners in the US. These taxations and how they are paid depends on the type of business (i.e. sole proprietorship, partnership, or corporation). The first tax everyone is quite familiar with however income tax for businesses is a bit different.  Limited Liability Companies (LLCs) and corporations are taxed as separate entities.  Other businesses are not taxed separately from the owner; it is just included in the individuals return.  Income taxes for businesses are generally paid as it is earned throughout the year.

Next there is Employment taxes. These come when you have employees. Employment taxes are a combination of Social security and Medicare taxes, Federal income tax withholdings and Federal unemployment taxes.  These are all accompanied by their corresponding forms and obligations. Thirdly, there are taxes on the self-employed. This tax is primarily placed upon individuals who work for themselves. It is a social security and Medicare tax therefore the individual is provided with disability benefits, hospital insurance benefits, and retirement benefits. Employment Taxes are not Self-Employment taxes. SE taxes have different stipulations. Lastly, there is an Excise Tax, which is basically a tax paid on goods relevant to the business (ie. gasoline for a worktruck) and is usually included in the price of the good.

A profit and loss from called a Schedule C is required as well. Others forms and documents are required on a situational basis. They can all be found at the IRS’ Businesses Page.