When you run a business, there are many different business finance obligations that you’ll need to follow. Failure to do so can result in significant financial and even legal consequences. If you’re wondering what your business financial obligations are, read on! This article will teach you everything you need to know about business taxes and other financial requirements.
What are business taxes?
Business taxes, also known as self-employment taxes, are the payments you need to make to local and federal tax authorities. It includes any income tax that you’ll have to pay on your own if you’re not working for an employer. Overall, they’re the equivalent of personal income taxes – just because you’re not working for a company doesn’t mean that you won’t have to pay taxes.
Employee vs. self-employed tax responsibilities
When you work as an employee, your employer will take care of all your business finance obligations by withholding the appropriate sum from your paycheck and paying it on your behalf every month or quarter. However, if you’re self-employed, you’ll need to take care of your business taxes on your own.
How much do business owners pay in taxes?
This depends on many factors, such as the industry that they work in and where they live. Business owners who find themselves paying unnecessarily high amounts of tax should consider obtaining quality tax services from a company like Liberty Tax Service.
Other Business Finance Obligations:
Doing your taxes is not the only thing you’ll need to do as part of your business financial obligations. You also need to make sure that you’re keeping all accounting records, financial statements, and payroll information current. Additionally, if you have employees, you’ll need to take care of certain legal requirements, such as withholding the correct amount from employee paychecks and filing employment tax reports.
What are common business financial obligations?
Every business has different financial requirements, based on the industry they operate in and other factors. However, there are some prevalent legal requirements that all businesses need to follow. Here is a list of the most important ones:
- File any applicable business taxes
- Maintain an accounting system
- Keep all financial records and account ledgers for at least five years
- File annual reports with the state of incorporation, if applicable
- Comply with state and federal minimum wage laws.
In conclusion, business finance obligations are all of the taxes, reports, and other financial requirements that you need to fulfill to run your business successfully. It can be challenging to keep up with them on your own, which is why many companies choose to hire quality accountants or tax professionals to help them with their business finances.
