Small business taxes for dummies: A quick guide

Small business

Have you just started, or are about to start, a small business? Are you wondering about taxes for small businesses and how to pay them?

Small business taxes can seem like a hassle that you don’t need. However, taxes are a critical aspect of your business. They can be overwhelming, but they don’t have to be! This quick guide will walk you through everything you need to know to make filing your small business taxes a breeze.

Keep reading to find out all about small business taxes for dummies, understanding business tax, and small business tax deductions.

Small Business Taxes for Dummies

From common deductions to complex tax laws, we’ve got you covered. So whether you’re a tax novice or a seasoned pro, this guide is for you. Let’s get started!

Business Income Tax

There are different taxes that businesses are required to pay. Business income tax is one of the most important. This tax is imposed on the income of the business, and it is used to fund several government programs and services.

Businesses are required to file a tax return and pay this tax. If a business does not pay its business income tax, it may be subject to penalties and interest.

Claiming Business Expenses

Business expenses are deductible if they are necessary and ordinary. Necessary expenses are those that are essential to running your business. Ordinary expenses are those that are common and accepted in your industry.

These expenses are for personal use, such as travel or entertainment, and fines or penalties. You must be able to prove that the expense was incurred solely for business purposes.

Keep good records of all your expenses, including receipts, invoices, and canceled checks. If you don’t have receipts, the IRS may allow you to deduct your expenses if you can prove them with other documentation, such as canceled checks, bank statements, or credit card statements.

Self-Employment Tax

The self-employment tax is a Social Security and Medicare tax for self-employed individuals. This tax is paid in addition to any other taxes that you may owe, such as income tax.

If you’re self-employed, you’ll need to file a return and pay the self-employment tax by April 15th of each year. You may also need to make estimated tax payments throughout the year if you expect to owe more than $1,000 in taxes.

Estimated Taxes

Estimated taxes are taxes that you pay on income that is not subject to withholding. This includes income from self-employment, dividends, interests, rent, alimony, and capital gains. You must make estimated tax payments if you expect to owe tax of $1,000 or more when you file your return.

If you don’t pay the right amount of tax through withholding or estimated tax payments, you may be charged a penalty. To avoid this penalty, you must pay at least 90% of the tax you expect to owe for the present year or 100% of the tax you owe for the previous year, whichever is smaller.

If you’re not sure how much tax you’ll owe, you can use the 2022 SmallBusiness Tax Rate Calculator to help you calculate your payments.

Now You Know!

If you are a small business owner, it is essential to know what taxes you need to pay and when they are due. This quick guide about small business taxes for dummies will help you understand the basics of small business taxes so that you can keep your business compliant. Remember, if you have any questions, be sure to speak with a tax professional to get the answers you need.

Keep browsing our blog for other business tips and insights.

Other articles from mtltimes.ca – totimes.ca – otttimes.ca

Air vent cleaning Montreal
Before and after picture of a typical air duct cleaning in a home

Dryer vent cleaning in Montreal and surrounding areas – Mtl Duct Cleaning

Mtl Wine Gal

Mtl Wine Gal bringing affordable high-end private imported wine to your table

SHAN Collection from Montreal

Hottest and latest bikini styles

Facebook
Twitter
LinkedIn
Email
Is it possible to get an A for a 5-paragraph essay assignment in 1 hour? We can safely say yes, a student can get an A+ mark if he turns to EduJungles


staycation

The ultimate guide to planning a long family staycation in Canada

To guarantee that everyone has an amazing time, careful planning is necessary when organizing a lengthy staycation. Here’s the ultimate guide to planning your family staycation in Canada. Canada, with its vast landscapes, diverse cities, and rich cultural heritage, offers endless possibilities for a memorable family staycation. Whether you’re exploring the stunning natural beauty of

Meal kits

Cost vs. Convenience: Analyzing meal kits and traditional cooking

In this modern world and modern times, convenience often takes priority over cost, especially when it comes to food. Meal kits and traditional cooking represent two different approaches to home dining, and each of them has advantages and disadvantages. Analyzing these methods through the lens of cost and convenience provides insight into why individuals might

Condo renovations

Condo renovations Dos and Don’ts: Expert Tips for a Successful Project

Embarking on a condo renovations journey can be both exhilarating and daunting. Imagine transforming your living space into a stylish haven that reflects your personality and meets your needs. While exciting, the process can be full of challenges and unforeseen hiccups. That’s why we’ve gathered some condo renovation dos and don’ts from the experts to

Terrific Hair

Terrific Hair Means Tamanu – Earth to Body

Curly, straight, thick, thin, kinky or silky, tamanu loves and makes terrific Hair.  And scalps. Nutritionally dense yet gentle, tamanu is an effective and versatile nut oil. It stimulates, helps promote growth. prevents hair loss, reduces scalp itch and irritations and adds a natural sheen! Make tamanu a part of your hair and scalp care

Understanding the 4 legal process after a DUI Crash

A single mistake can have serious consequences, especially when driving under the influence. The aftermath of a DUI crash extends beyond physical harm and property damage. It involves a complex legal process that may feel overwhelming. As a responsible citizen, it’s vital to grasp the legal system and your rights in such situations. This blog

personal injury lawyer

Pedestrian accident: How a personal injury lawyer can help you

Accidents involving pedestrians can be life-altering. You could be walking down the street or crossing a street. A vehicle’s sudden impact can change everything right away. If you’ve found yourself in such a situation, you might be wondering how to move forward. This is where a personal injury lawyer steps in, offering crucial help and

Mtltimes Subscription

The latest on what’s moving Montreal and the world – delivered straight to your inbox