Small business taxes FAQs
Knowing what taxes you'll need to pay and when can be confusing. Generally, yes, you do need to pay quarterly estimated business taxes. If you don't pay or underpay, you may end up paying penalties and a large tax bill when you file your yearly taxes. The general guideline is that if you expect to owe over $1000 in taxes by the end of the year, you should pay estimated quarterly taxes. Corporations are expected to make quarterly tax payments if they only expect to owe $500 or more in taxes at year end. Additionally, if you paid more than zero the year before, you may also be expected to pay quarterly taxes.
To be on the safe side, you should pay quarterly taxes unless it is your first year of business and you do not expect to make a profit. You can pay your estimated taxes online or by mail.
If your state requires sales tax and you sell taxable items, you'll need to pay the collected sales tax. Many tax experts recommend that you pay these taxes quarterly. The task is easier if you use sales technologies that will configure and track collected taxes for you. If you sell products to other states, you may be required to collect their sales tax as well.
Collecting the proper amount of taxes is easier than it has ever been. Often point-of-sale systems can be used to collect and track your sales records for you. If you sell online, often the e-commerce service can configure and collect sales taxes for you.
If your company has employees, you need to pay their employment taxes. If you are self-employed, you need to pay your own employment taxes. Employers should make these payments monthly or semi-weekly. Self-employed people should pay estimated quarterly taxes.