It was reported that between March 2019 and March 2020, roughly 60,000 new businesses were started in Washington State. As this number continues to increase, it is important to understand the responsibility of starting your own business, especially when it comes to paying your state and federal taxes. Here are some of the top tips according to the SBA in order to make the process of paying for your business taxes easier.
Pick Your Tax Year
When filing your taxes for the first time, you are able to choose your tax year. Most of the time business owners opt to stick to the calendar year to make things a bit easier to follow. However, if your business is more suitable for a different type of annual cycle this is the time to set it straight.
Find out State Tax Obligations
Each state has different tax obligations, so it is extremely important to find out what those obligations are in the state where you are creating your business. The most common types of state tax requirements are income and employment taxes. This will depend on whether you have a corporation or a sole proprietorship. Make sure to speak with a local professional to determine what your obligations are if you are unclear.
Determine Federal Tax Obligations
Depending on your business structure, your federal tax obligations will vary. The five most common types of business taxes are income tax, self-employment tax, estimate tax, employer tax, and excise tax. Each category of business might have special rules or forms, so it is important to speak to a local professional to ensure that you don’t miss anything.
We have a wide range of business services available to meet the needs of our community’s business owners. To learn more, visit our website or give us a call at 1-800-422-5852.