Paying Taxes for Your Business: Soap Saturdays

Elizabeth

This week on Soap Saturdays we are discussing a very important aspect of running your own business. Once you have your tax ID number you will need to know how to...

Pay Your State and County Taxes: Each state is a bit different in the forms that you are required to fill out to pay your taxes. For the type of business that I have, in my state I pay my business taxes once every three 

Paying Taxes

months, or quarterly. When I moved my soap business from Wisconsin to North Carolina, I had to learn how to fill out the new forms and figure out the appropriate tax amount to take from each sale, because it was different from one state to the next. One of the differences I faced, was that in Wisconsin the county taxes were lumped together in the payment, but here in NC it is  separated on a separate document. So you need to get to know the forms and learn how to properly fill out the information.

It is VERY important to keep an accurate account of your sales so that you can fill in the right information. The form usually asks for information such as gross sales before taxes, items that are exempt from being taxed (items shipped or sold out of state), items sold at wholesale, and purchases that need to be taxed.

Keep track also of the various counties in which your items are sold, as this will also need to be recorded to pay your tax accordingly.

Most states have the forms available online to make filling out and paying easier, but my state also sends out the paper forms, just to make sure you have access to paying them on time. Double check the forms you are sent in the mail to confirm they are up to date before sending them in. There was one time I couldn't figure out why the totals I came up with to pay the Department Of Revenue wasn't adding up with the forms they gave me, so I went to the online forms to see if I could figure out what the problem was, and it turned out that the forms I was sent hadn't been updated yet, and I would have been under paying what I owed had I used the forms. My problem was easily remedied by using the online forms to fill out and pay for that quarter, as the online forms were accurate. Since then, I've always paid my taxes online to be sure it is correct and updated.

Don't be afraid to call your state's DOR and have them talk you through each space on the forms when you start paying your business taxes. It may take a little wait time to get someone on the phone, but they will answer your questions and help you, because believe me, they want your money! It will get easier and easier each quarter paying your taxes as you are familiarized with the process.

home businessSubmit Your Federal Taxes: And don't forget your federal taxes! That is a little more fun because you can get many expenses written off as a tax credit. When you pay your federal taxes at the beginning of the year, you can write off mileage, and costs that were used for business purposes such as printers, computers, monitors, equipment, business/office space (even for a home based business), phone and power bills, business vehicles, etc. so remember to keep receipts handy from purchases throughout the year. To get your business space written off as a tax credit for a home business, you will need to measure the square footage of the space that you use, based off the percentage of the rest of your home, to submit with your other tax information.

Paying your business taxes is probably not going to be your favorite part of running a successful business, but you will heave a huge sigh of relief each period that it is completed and be able to continue to focus on the other aspects of your business. It is a necessary component of  being a responsible business owner, so just tighten up your belt, open your pockets (or pocket book) and get it done!  

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