Everyone is pretty sure about filing their “taxes”, but when you’re running a business, there are so many OTHER taxes to pay attention to - many small business owners get cross-wise with the tax man very easily!
Here in Texas, there are a few that are readily overlooked:
For everyone –
Even if you work from a home office, your county tax assessor will tax you on your business assets and your inventory (if you keep inventory). You will likely get the county’s estimate of what your business assets are, and you have an opportunity to assert a different value by providing an inventory.
If you’ve paid anyone more than $600 in a tax year for services, you must issue them a 1099 form by January 31 of the following year. Transmit those 1099 forms to the IRS using form 1096.
For businesses with employees –
Of course, if you have employees, you have to report their earnings and withholdings on form W-2, which is transmitted to the government using form W-3. It’s better to use a Federal EIN to track these payments and accounts, even if you’re a sole proprietor.
You have to register and report your wages paid to the Texas Workforce Commission on at least a quarterly basis.
Quarterly, you have to report your wages paid and withholdings to the IRS using form 941. You may be required to make monthly or weekly withholdings deposits, but the returns are required quarterly.
Annually, you have to report your wages paid to the IRS using form 940, to calculate and report Federal Unemployment Tax.
Everyone you employ, including contractors, must be documented with an I-9, W-4 or W-9 and evidence that you checked their social security number for validity and their state issued photo ID.
For incorporated businesses (including LLCs)
Annually, you must report your revenue to the State of Texas on the Franchise Tax Return form, and file a Public Information Report.
These reports are required to maintain your corporation or LLC in good standing, and if you fail to file them, your corporation will be forfeited until you get them all filed.
If you have more than about $300,000 in gross revenue in Texas, you will have to pay a tax to the State of Texas to maintain your corporate privileges.
If you’re unsure of whether you have filed these returns, or whether any of these apply to you, let me know and I’ll be glad to guide you!