If you have never ran a business than you probably don't know much about business taxes, and this can end up sinking your company. One of the most important things that you have to do before you start a business is to talk with a tax professional, to find out what you need to do before you start making money and paying people. Here are some of the things that you need to ask in a tax meeting, and you need to hire a tax professional right away.
How Much Should be Saved?
Many businesses suffer because at the end of the year they haven't saved enough to pay their taxes, and then they end up on a payment plan or owing the IRS. This is not a great way to start a business, and the financial strain can end up being great enough that you can't continue on and you have to close the doors. Find out how much should be saved with each profit increment, so you can run your business frugally and be prepared.
What Employee Taxes get Withheld?
If you are going to have employees, you need to find out how you want to claim them. You may want to give them full-time positions, make them independent contractors, or something different based on the type of business that you have. Once you know how they will file you need to know how much to take out of their pay. Hire an accountant or bookkeeper to do this for you.
What Purchases Are Deductible
You may think that you can assume what is or isn't deductible, but you may be surprised. Talk with the tax advisor about where you need to be spending money, how you should be saving money, and what purchases and expenses are going to benefit at the end of the year. They can let you know how much to donate, use on business expenses and more.
You don't want to go into your first year of business not knowing what you should expect, and not knowing what to do with your taxes. Instead, you want to see what options are available for you to sit down with a tax professional so they can explain to you what will best benefit you, the business, and also the employees and potential people that will work for you once you are open and growing.
For more information, contact your local tax advisory team.