First, you need to establish the type of company you are. In order to know which taxes your business is subject to, you need to figure out which type of business it is. S corporations, Partnerships, Sole Proprietorships, Corporations, and Limited Liability Company (LLC) are the most common types of business. Small businesses like a family-owned pizza company are generally S Corporations.

You will also need to apply for a Federal Tax Identification number or an EIN. Once you have been assigned your EIN, you can begin filling out your tax forms. Most businesses are subject to income tax, self-employment or employment taxes, and excise taxes. Every business is required to submit annual income tax returns. The income tax will be paid as you receive earnings within the company. Each employee normally has income tax withheld from their paycheck, the business also will have a tax withholding. You will need to pay the tax as you earn the monthly on a monthly or quarterly basis. Some companies use an estimated tax form to help them pay their businesses income taxes. Estimated tax payments will help a business pay for the yearly amount owed on their income taxes so they do not have to come up with one lump sum at the end of the year.

Every business is subject to Medicare and Social Security taxes. Self-employed individuals are responsible for paying their portion to Medicare and Social Security. When an employer has employees, they must pay their Social security and Medicare taxes, Federal income tax withholdings, and the Federal unemployment (FUTA) tax.

Paying Your Taxes
The IRS provides free information on their website for small businesses about paying your taxes. The IRS also has some valuable tips on getting small businesses off the ground with checklists for your business tax account. The tax deductions can be frustrating if you do not know what you are doing and which forms you need to fill out. A tax accountant is always a wonderful investment because they can help you file the proper forms.

Creating a business tax account will help you pay your taxes on time and in full. Here are some simple steps to follow when you are creating a tax account:

• Update Your Accounting. At the end of the year, you must know your companies financial situation. Spend time with your accountant to be sure all the books are up to date and accurate.


• Defer Income. If you can, hold off on receiving money till the first week of January as opposed to December. If you receive the money in January versus in December, you will not have to pay taxes on that money until April of the next year.


• Increase Expenses. This sounds silly, but increasing the amount you purchase will help to maximize deductions for the tax year. Office Supplies, Equipment, Travel and paying your bills early all add up for deductions.


• Inventory. Always check your inventory for damaged goods or obsolete products. Added deductions come from the drop in market value of your inventory.


• Retirement Plan. Making payments to your retirement plan will help reduce your income for the year. Discuss the best strategy with your accountant or financial planner.

QuickBooks is a great way to keep track of all your company expenses and it also provides information you will need for filing your tax returns. If you choose to do the business taxes yourself, you should purchase TurboTax or another tax program that will guide you through every aspect of your business.