Most businesses start out small. As a new business owner you need to know your
federal tax responsibilities. This page
provides links to basic federal tax information for people who are starting a
business. It also provides information
to assist in making basic business decisions. The list should not be construed as all-inclusive. Other steps may be appropriate for your
specific type of business
The form of business you operate
determines what taxes you must pay and how you pay them. The following are the four general types of
business taxes.
Income Tax
All business except partnerships must file
an annual income tax return. Partnerships
file an information return. The
form you use depends on how your business is organized.
The federal income tax is a pay-as-you-go
tax. You must pay the tax as you
earn or receive income during the year. An employee usually has income tax withheld from his or her
pay. If you do not pay your tax
through withholding, or do not pay enough tax that way, you might have to pay
estimated tax. If you are not
required to make estimated tax payments, you may pay any tax due when you file
your return. For additional
information refer to Publication 583, Starting
a Business and Keeping Records.
Self-Employment Tax
Self-employment tax (SE tax) is a social
security and Medicare tax primarily for individuals who work for
themselves. Your payments of SE
tax contribute to your coverage under the social security system. Social security coverage provides you with
retirement benefits, disability benefits, survivor benefits, and hospital
insurance (Medicare) benefits.
You must pay SE tax and file Schedule SE
(Form 1040) if either of the following applies.
For additional information, refer to Self-Employment Tax
Employment Taxes
When you have employees, you as the
employer have certain employment tax responsibilities that you must pay
and forms you must file. Employment
taxes include the following:
Excise Tax
Excise taxes are taxes paid when purchases
are made on a specific good, such as gasoline. Excise taxes are often included in the price of the product.
There are also excise taxes on
activities, such as on wagering or on highway usage by trucks. Excise Tax has several general excise tax
programs. One of the major
components of the excise program is motor fuel. For additional information, refer to Excise Taxes