By Alfred Ardis
A necessary part of running your own company is your business tax. Depending on your company type and size, you may qualify for incentives or considerations regarding your local or state obligations. You will be required to file paperwork for tax purposes as well, which involves much more than a simple, straightforward return. Make sure you work with an accountant who is experienced in the tax laws and rules in your area and for your type of business.
Based on where your company is located, you may have to pay local taxes on the property. Many local governments will, however, offer a reduced rate in return for you bringing jobs or other revenue to the area. If you are a small business, this may not apply.
State government may also offer incentives if your company is large enough to bring significant jobs to the area. This would mean, hopefully, that more people move to the area and thereby increase the economy. These incentives may be in the form of credits if your business hires and performs based on certain criteria. Annual state returns must be filed, so you'll want to understand your obligations as well as all the credits you may be due.
Federal obligations will include your annual return. You may also be required to make estimated payments throughout the year. If you have employees, you must pay according to certain criteria for each person. Not only do you need an accounting professional to help you understand what applies, but you also need a competent staff that is knowledgeable about withholding and legal requirements when hiring and paying employees.
An excise tax may apply if you manufacture certain products, operate specific businesses, use various kinds of facilities, equipment or products in your operations, or receive payment for certain services. Your accounting professional should be able to tell you what applies to your company.
If you are considering opening a new business and are exploring the best locations, you will want to investigate the laws in the area that may be the best for your situation. Some areas of the country are more eager than others to have certain types of establishments open to increase the economy and bring jobs to their particular city. In addition to those incentives, however, make sure you understand the long-term implications of opening a business in that specific area as far as your business tax obligations will be.
What may sound like a good deal to start with may turn into a larger expense for your company down the road.
No matter if your company is large or small, spanning one local area or many states, consult a professional to understand the business tax rules and credits that apply to you.
For information on all things business tax, Michigan residents visit the Michigan Chamber of Commerce. Learn more at http://www.michamber.com/explore-the-issues.
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