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There are five important types of business taxes, and they are employment (withholding) tax, corporate franchise tax, gross-receipts tax, excise tax and value added tax or VAT. There are some kinds of industries or firms that pay additional taxes peculiar to their industries. These are industries like the mining, insurance, petroleum extraction companies, etc. All taxes are ‘people taxes’ because they involve and affect human beings and not some abstraction labeled ‘business.’
An annual income tax return must be filed by all businesses except partnerships. Information return is filed by Partnerships. How your business is organized will determine the form you use. The centralized income tax is a pay-as-you-go tax. As you earn or receive income during the year, you must pay the tax.
By making regular payments of estimated tax during the year, you must pay taxes on income, including self-employment tax.
For individuals who work for themselves, there is the Self-employment tax (SE tax) which is a social security and Medicare tax mainly. Under the social security system, your payments of SE tax contribute to your coverage. Social security coverage provides you with disability benefits, retirement benefits, survivor benefits, and hospital insurance (Medicare) benefits.
Generally, you must pay SE tax and file Schedule SE (Form 1040) if either of the following applies.
You as the employer have certain employment tax responsibilities when you have employees working for you, which you must pay and also forms you must file. Employment taxes include the following:
- * Federal income tax withholding
- * Social security and Medicare taxes
- * Federal unemployment (FUTA) tax
This section describes the excise taxes you may have to pay and the forms you have to file if you do any of the following.
- * Operate certain kinds of businesses.
- * Manufacture or sell certain products.
- * Receive payment for certain services.
- * Use various kinds of equipment, facilities, or products.