Running a business is rarely a simple endeavor. From the first financing efforts to the eventual perpetuation of everyday affairs, it seems like you never get the break you deserve. Paying your business’s taxes is one of the many elements of management that makes the process more difficult. If you’re a business owner or if you’re considering becoming one, then you might be wondering just how complicated your taxes will be. Ultimately, this depends on a number of factors. Here’s a general breakdown of what determines the complexity of your taxes.
The Size of Your Business
The bigger your business is, the more complicated your taxes are likely to be. More employees, for example, will complicate the process of paying payroll tax. A larger inventory will be harder to count, making it more difficult to calculate how much you owe. Large businesses are also more likely to be audited, which adds an additional level of complexity to the situation. While there’s not a perfect correlation between size and complications, smaller businesses generally have an easier time paying their taxes.
The Type of Business You Operate
Certain types of businesses make it easier to file your taxes. If you’re a small-scale business that deals with just a few products and services, you’ll have an easier time checking your inventory and paying your taxes. If you’ve got a large variety of products and deal with clients all around the world, the situation will be much more complicated.
The State You’re Operating In
In addition to the federal taxes paid by every business in the nation, businesses also must pay taxes to the government from their home state. Every state has its own tax codes, and some are much simpler than others. The complexity of your state’s taxes will determine how challenging the process is for your business.
Consider the Municipality You’re Operating In
In addition to federal and state taxes, many businesses also have to pay taxes to local governments. This is especially true if the business owns the property, since towns and cities typically levy property taxes.
Meet With Tax Attorneys
One way businesses make paying taxes easier is by meeting with tax attorneys. If you’re working with lawyers, then the whole process should become a lot simpler for you as the business owner.
There’s no single way to determine who complicated your business’s taxes will be. With that being said, you can use the criteria above to get a general idea.
Bio: Rachelle Wilber is a freelance writer living in the San Diego, California area. She graduated from San Diego State University with her Bachelor’s Degree in Journalism and Media Studies. She tries to find an interest in all topics and themes, which prompts her writing. When she isn’t on her porch writing in the sun, you can find her shopping, at the beach, or at the gym. Follow her on Twitter and Facebook: @RachelleWilber; https://www.facebook.com/profile.php?id=100009221637700