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Types of Business Taxes
Income and Self-Employment Taxes
The form of business you operate determines what taxes you must
pay and how you pay them. The following are the four general
kinds of business taxes.
* Income tax.
* Self-employment tax.
* Employment taxes.
* Excise taxes.
Tip
You may want to get Publication IRS 509. It has tax calendars
that tell you when to file returns and make tax payments.
Income Tax
All businesses except partnerships must file an annual income
tax return. Partnerships file an information return. Which form
you use depends on how your business is organized.
The federal income tax is a pay-as-you-go tax. You must pay the
tax as you earn or receive income during the year. An employee
usually has income tax withheld from his or her pay. If you do
not pay your tax through withholding, or do not pay enough tax
that way, you might have to pay estimated tax. If you are not
required to make estimated tax payments, you may pay any tax
due when you file your return.
Estimated tax. Generally, you must pay taxes on income,
including self-employment tax (discussed next), by making
regular payments of estimated tax during the year.
Sole proprietors, partners, and S corporation shareholders. You
generally have to make estimated tax payments if you expect to
owe tax of $1,000 or more when you file your return. Use Form
1040-ES, Estimated Tax for Individuals, to figure and pay your
estimated tax. For more information, see IRS Publication 505,
Tax Withholding and Estimated Tax.
Corporations. You generally have to make estimated tax payments
for your corporation if you expect it to owe tax of $500 or
more when you file its return. Use Form 1120-W, Estimated Tax
for Corporations, to figure the estimated tax. You must deposit
the payments as explained on page 8 under Depositing Taxes. For
more information, see IRS Publication 542.
Self-Employment Tax
Self-employment tax (SE tax) is a social security and Medicare
tax primarily for individuals who work for themselves. Your
payments of SE tax contribute to your coverage under the social
security system. Social security coverage provides you with
retirement benefits, disability benefits, survivor benefits,
and hospital insurance (Medicare) benefits.
You must pay SE tax and file Schedule SE (Form 1040) if either
of the following applies.
1. Your net earnings from self-employment were $400 or
more.
2. You had church employee income of $108.28 or more.
Use Schedule SE (Form 1040) to figure your SE tax. For more
information, see IRS Publication 533, Self-Employment Tax.
Tip
You can deduct one-half of your SE tax as an adjustment to
income on your Form 1040.
December 12, 2008
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Source:
http://www.irs.gov/publications/p583/ar02.html#d0e196
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