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Filing Taxes for Small Business Owners

By March 15, 2022Business, Taxes

Filing taxes for small business owners can be very overwhelming and stressful. One thing though seems to be at the foundation of the issue and is illustrated in a question we get fairly often.

 

Does my accountant file ALL the tax returns I’m supposed to pay?

 

We get this question a lot. Usually sometime in May, after taxes have been filed, and the client gets a letter from the City stating they didn’t pay their Business Personal Property Tax.

 

What is Business Personal Property Tax? Well, you paid a Sales Tax when you purchased your office equipment and now you must also pay another tax on top of that just because it’s for your business. See details about Business Personal Property Tax: One More Reason the IRS Sucks!

 

Truth is, there are like 100 different taxes (not exaggerating, google it).

 

Seriously, watch the video below for just a broad sampling of various taxes.

 

 

So most of them you don’t have to think about because they’re “pay as you go” like the Sales Tax you pay at the grocery register.

 

Excise Taxes are also “pay as you go.” They’re another tax on top of the sales tax you’re already paying to apparently discourage consumption of products like cigarettes or sugary sodas. Tanning tax? Really? And don’t even get me started on Maryland’s Flush Tax! You know, sometimes you just feel the need to double flush after eating some spicy curry the night before.

 

But then there are others that fall under the spectrum of Income Tax and Payroll Taxes that individuals and business owners are responsible for filing each year, and that’s where your accountant comes in.

 

Usually, when you engage a new accountant to do your Income Tax Return, that should cover both your Personal Income Return and your Business Tax Return.

 

Sales Tax, Business Personal Property Tax and Payroll Taxes are all separate filings, each with its own form.

 

As a service, Incite Tax also includes Payroll Taxes with your Business Return, but that’s just us. Not all accountants are created equal. Just because you’ve hired an accountant for Personal and Business Returns, that does not necessarily encompass all filings.

 

If you would like your accountant to file any other taxes, this should be discussed with your accountant.

 

Look at it this way. Your Personal Return is on one form, your Business Return is on another form. If there are any other forms involved, they are most likely a separate return, with a separate filing, and a separate fee. You and your accountant can discuss if you would like to engage his services for those returns.

 

You might be thinking, that’s a lot of fees to get my taxes filed correctly. But that’s just it. They will be filed correctly. Doing them yourself may save you money in the short term but it will cost a lot more if you end up with penalty fees and you need to hire an accountant to fix them.

 

In the very least do a one-time consulting meeting with an accountant even if you don’t hire them full time, to make sure you are aware of every single tax your business is responsible for. If you do hire an accountant or already have one, discuss who is responsible for each of the taxes your business needs to file.

 

So, now you know what taxes your business needs to pay and who is responsible for each of them. Eliminating these unknowns about filing taxes for small business owners will relieve a lot of tax related stress throughout the whole year.

 

 

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