Commonly Asked Questions About Business Taxes

Taxes are complicated. For businesses, they can get especially convoluted. While tax season itself is a long way off, most businesses need to keep their tax obligations in mind year-round.

Following are some of the questions people commonly ask about business taxes.

Business Tax Deductions

In order to minimize their tax burdens, businesses may try to take advantage of numerous deductions and credits. Often, these are areas of some confusion.

Can my business deduct (X) expense?

Among the items you can deduct from your taxes are:

  • Employee pay
  • Administrative costs
  • Business-related travel and entertainment
  • Rent for commercial space
  • Some types of taxes, such as state taxes, payroll taxes, and certain property taxes
  • Business insurance
  • Interest on business loans

In some cases, special rules may apply, so you’ll want to consult with a tax professional when figuring your tax deductions.

When are business gifts tax deductible?

Gifts made to clients or business associates can be deducted if they fall within the following limits:

  • They amount to no more than $25 per person in business expenses
  • The item cannot be considered to be entertainment
  • You keep records proving the gift’s business purpose

In addition, shipping and handling aren’t included in the $25 limit if they don’t add to the gift’s value. Finally, it’s worth noting that gifts costing less than $4 that you give out regularly and that have your business name engraved on them don’t count.

Business Tax Obligations

A business’s tax obligations can become onerous, so some organizations might try to get themselves exempt. That’s only feasible in certain cases.

Who pays business tax?

Most organizations must pay some form of business taxes. The exact type of business taxes you need to pay depend on your organization, and might include any of the following:

  • Business income taxes for any business that earns a profit
  • Self-employment taxes for sole-proprietors and self-employed individuals
  • Employment taxes, for those who have employees
  • Excise taxes, for those who sell specific types of products

Can my business be tax exempt?

In order to be tax exempt, your organization’s purpose cannot be to generate a profit. Organizations such as churches, charities, and scientific organizations typically fit these requirements.

Due Dates and Other Concerns

Some of the other concerns businesses have with respect to their taxes are more logistical, such as the following.

When are business taxes due?

The due dates for business taxes, returns, and documents vary greatly, depending on the type of business you run, what types of documents you’re using, whether you’re paying estimated taxes, and so forth. In general, though, most documents must be sent within the first few months of the year.

Are business tax returns public information?

In the United States, corporate tax returns are not public record. Other nations may have other rules, which is important if you do business internationally.

What is business tax registration?

Business tax registration is when you register your business with a state or local government entity. Typically, you’ll do this only if your business is likely to report sales taxes or tax withholding for employees.

Getting Help with Other Tax Matters

If you have further tax matters to discuss, a tax attorney can help you navigate the process of meeting your obligations.

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