Question

Describe the kinds of taxes that small businesses need to file/pay.

Answer 1

The kind of taxes that small businesses need to pay are detailed below-

1. Income tax- The company has to pay taxes on business profits.

2. Self-employment tax- This tax is deducted from employee's paycheck and is paid as a self-employed business owner  to fund social security and medicare.

3. Sales tax- In case the small business sell goods and services, it is responsible for paying sales tax and filing sales tax return

4. Employment tax- As the name suggests, this tax is deducted by the business from employee paychecks for federal income taxes, social security etc.

5. Excise tax- These are indirect taxes and are included in the cost of the product. It is not directly paid by the customer and is collected by the business.

6. Property tax- If the business owns a property then it has to pay property tax to the city where the business is located.