Hello and welcome to our newest blog post series about Business Taxes! In this blog post, as well as several of the upcoming ones, we’ll be discussing business taxes, and more specifically, payroll and employment taxes. These are the taxes a business is required to pay related to their employees.
In this series, we’ll start with the basics and over time, show you everything you need to know about business taxes to make sure you stay IRS-compliant. And if you or your business are struggling with any current tax debt, we’ll discuss some of your options along the way as well. But if you or your business recently received a notice or a letter from the IRS, we recommend you give one of our highly trained tax resolution specialists a call today at (844) 582-3323.
For those of you interested in learning more about business taxes, let’s get started.
As you know, or as you’re quickly learning, life as a business owner means you are not only responsible for filing your individual taxes, but also for filing the taxes for your business. If you are a sole proprietor, a partnership or a single-member LLC without employees, this blog series, unfortunately, is not for you. Feel free to check out our Rush Tax Resolution Services series for information regarding different tax resolution options that might be more helpful for you.
In this series, we’ll be focusing on the business taxes required to be paid by small businesses with employees. In this blog post, we’ll start with the IRS’s stipulations for businesses with employees and then discuss more employee-related business tax information in our next post.
Businesses with Employees
As of January 31st, 2021, according to the IRS Page Businesses with Employees, “as a business owner, when another person performs work for you, you must first correctly classify that person as an independent contractor or employee.
“If the person is an independent contractor, refer to Forms and Associated Taxes for Independent Contractors for your tax responsibilities.
“If the person is classified as an employee you must have an Employer Identification Number (EIN). Your tax responsibilities include withholding, depositing, reporting, and paying employment taxes. You must also give certain forms to your employees, they must give certain forms to you, and you must send certain forms to the IRS and SSA.”
As you can see from the excerpt from the IRS page, determining whether your business should hire an employee or an independent contractor is a pretty important decision as it determines the different tax responsibilities and paperwork that will be required of your business. In the next blog post, Business Taxes: 1099 Independent Contractors, we’ll discuss the different business taxes and paperwork a business is required to file with the IRS if they hire independent contractors. In one of the following posts, Business Taxes: Hiring W-2 Employees, we’ll begin to cover the different payroll and employment taxes associated with employing W-2 employees.
In the meantime, if you need any assistance with any payroll and employment taxes, feel free to give one of our tax resolutions specialists a call today! We offer a free initial consultation and transcript analysis to new clients so you can discover your options risk-free!