If you own a small business, you need to know what business taxes you may have to deal with. There are basic business taxes requirements that you need to comply with to not get into trouble with the IRS. These business taxes requirements are:
Federal Identification Number (FEIN) or Employer ID number (EIN)
What is a Federal Identification number or Employer ID number? A federal employer identification number is also known as the Employer ID number (aka FEIN or EIN) is required for:
A sole proprietor with a home based business who does not have any employees does not need the federal identification number or the Employer ID number.
How to obtain the federal identification number (FEIN) or the employer ID number (EIN)?
It is easy to obtain the federal identification number or the employer ID number. All you have to do is fill out the IRS federal From SS-4, the application for Employer Identification Number. If you do this online, the IRS will issue you a temporary EIN instantly. The real EIN will come in the mail about a week later.
Sales and Use Taxes for business
In many states, small businesses that sell good or taxable services need to collect sales and use taxes from their customers. The businesses then turn around the pay the state's sales and use taxes. If you have not collected them from your customers, you are still liable to pay the sales and use taxes to the state.
As an employer, you need to:
- withhold taxes
- register for federal and state unemployment insurance with the IRS and the state's department of labor or employment security
- provide worker's compensation and disability benefits, based on the federal and state laws
- keep accurate records