Top 5 Small-Business-Tax Types to Know of in 2021

by Agro Accounting CPA Accounting for Artists, Freelancers & Creative Com

Tax rules and obligations can be confusing as they often change. Ever since COVID-19 reared its ugly head, it has led to the development of new tax programs and incentives, all designed to help small businesses. In 2018, major tax legislation brought many changes for pass-through entities, and also bonus depreciation. You should take help from a certified public accountant (CPA) and obtain a Tax Preparation guide for Entrepreneurs in order to comply with current regulations and to pay the right amount of taxes.

For 2021, we expected some tax code changes for small businesses; however, there actually aren’t many changes. Instead, several tax credits, loan acts, and programs were created to help businesses weather the effects of COVID-19.

If you are a new small business owner, it is essential to stay updated on current tax laws in order to avoid paying a penalty on your tax amount due in the near future. To follow, here are some business taxes that you should be aware of.

Types of Small Business Taxes:

Depending on the structure of your small business, taxes can vary. However, you should know about these primary small business taxes:

Income tax—All businesses are subjected to file annual income returns except for not-for-profits, which file an information-only return with the IRS.
Self-employment tax—If you are self-employed, this tax is on your net earnings from self-employment and covers your Social Security and Medicare obligations. Even Airbnb Tax Preparation and Reporting can fall under this category!
Employment taxes—Do you have employees, and do you have taxes and forms related to their Social Security, federal income tax withholdings, Medicare taxes, and federal unemployment tax? (Payroll falls into this category.)
Excise tax—This tax type will only affect you if you make or sell certain types of goods and products, operate a particular business type, or use specific products, facilities, and equipment. The best examples of products that carry an excise tax are fuel, alcohol, and tobacco. If you wish to learn more about excise tax, get in touch with an online CPA.
Estimated taxes—Businesses ranging from sole proprietors to S corporations and partnerships must make quarterly estimated tax payments. This situation comes to be for salaried individuals too, if you don’t have taxes withheld from each paycheck or do not have a sufficient amount withheld from each paycheck.