How Do You Understand Taxes For Small Business?
There are three fundamental types of small business taxes: taxes that you pay on your gross revenue, taxes that you pay on your net profit (which is your gross revenue minus your allowable business expenses) and taxes that you pay on your payroll. State and local governments usually tax your gross revenue, while the federal government taxes your net profit in the form of income tax. Your state or city may collect income tax on your net profit as well. Both the federal government and your state will collect employment taxes. Work with your accountant to design a bookkeeping system that tracks each of the categories for which you must pay taxes. Your bookkeeping system should have space for entries that add up the total amount of revenue coming into your business in the form of sales receipts. If you have different kinds of revenue, such as retail and wholesale sales, your bookkeeping system should include separate columns for each. It should also provide you with a template for listing