How Does Business Pay Their Excise For Trading
The government imposes taxes duties on products and services that are either domestically manufactured or imported. Ideally, business incurs four different basic types of taxes such as the income tax, employment tax, excise tax, and self-employment tax. Besides, every state has its rate that requires every business to adhere to when remitting its business taxes. Most importantly, the nature of the business operations is a determining factor that defines how much fees it owes the government.
Booking Keeping and Accounting
Neglecting keeping records in business may cause severely damaged. Hiring an experienced professional in bookkeeping and accounting may help in managing daily activities. By recordkeeping, organizing financial transactions is simplified. It is easy to account for your purchasing records, sales receipts, and payment transaction conducted within a time frame.
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Outsourcing bookkeeping and accounting saves time and enables the owner to focus more on the growth of the business. Sometimes a business may factor its receivable assets to maintain the cash inflows and outflows. In such a situation, factoring is a savage wherein businesses sell their bill receivables to a third party called a factor. However, each transaction should be properly maintained in the books of accounts.
Excise Tax
The excise tax levied by the government varies from one business to another depending on the type of the business. The goods manufactured and sold are the core principle of the taxes imposed. Along with that, equipment, by-products used, and natures of operation too. These comprise air transportation taxes, fuel taxes, and environmental and communication taxes.
The excise tax imposed applies to beverages such as alcohols and fruit juices, tobacco, telephone services, cigarettes, and firearms to mention the least. The excise tax is levied on the production of alcohol products such as distilled spirits, beer, and wines. The level of alcohol by volume content determines the tax imposed. Additionally, pipe tobacco, loose tobacco, chewing tobacco, tubes, cigarettes, and cigars are taxed. The government imposes tax depending on the weight. The excise duty for a pack of twenty pieces ranges between $1 to $2 depending on the variety of tobacco. Technically the government imposes heavy taxation on these businesses to regulate the rate of consumption.
Businesses that are involved in the selling of alcohol products and tobacco are required to report and remit their taxes either after two weeks, quarterly or either annually. It is based on the total tax liability expected within one year. On every 14th and 29th of the month, business is expected to submit a report on excise taxes through the IRS. More also compile quarterly and annual reports. The excise tax levied on sales firearms and ammunition products including pistols, bullets, rifles, revolvers, and guns is at a flat rate percentage depending on the sales prices. For pistols and revolvers, the tax rate imposed is ten percent of the cost while other firearms at eleven percent.
Businesses are obligated to completely fill TTB Smart Form 5000.24. Excise tax payment is due semi-monthly. A comprehensive report is expected to be filled after every four months and annually.
Self-Employment and Employment Tax
Business owners are required to pay taxes for their employees. An employer can pay taxes through a check, money order or electronic deposit. Taxes contribute to social security and Medicare of both employers and employees.
Income Tax
All business except partnership is obligated to pay income tax. If it fails to pay, the owner is subjected to heavy penalties that can read to shut down the enterprise. The internal revenue services expect businesses to file an income tax return every year. However, depending on the state, the income tax may vary since the majority of states require a business to pay tax with regards to the business structure. If a company decides to use the withholding method to remit tax returns, it will earn income too.
Surprisingly large numbers of entrepreneurs and business owners overrule the idea of outsourcing the business. It is unfortunate they perceive the plan as very costly. In spite of that, they fail to understand they have invested heavily and the opportunity to expand the business may be thwarted. Outsourcing the business through digital marketing by post on Facebook, Twitter, websites is a way to increase the sales volume. Considering the discussed business activities, outsourcing the business may help to grow your business.
Payroll Processing
Managing payroll for more than ten employees may become a night horror. With the expansion of the business, hiring expertise with an in-depth understanding of salary payment relieves the business owner’s obligations. Paying your employees and filing taxes becomes easy.
Digital Marketing
Digital marketing has shifted marketing from traditional methods to modern through Instagram, LinkedIn, Twitter and Facebook. Businesses are earning a fortune through social media. Surprisingly, WhatsApp is widely used in business through messaging. Social media marketing is not a walk to the pack. Time is invited heavily before posting any product. After posting, one has to engage in a conversation by responding to customers’ messages. Outsourcing to social media agencies increases the number of customers at a tremendous rate.
Creative Designer
Also, outsourcing your creative work is a remarkable step that may steer the success of the business. Hiring a business developer will help in designing a website, logo, advertisement banner and business card. A creative design or logo will increase brand presence in the market. Ultimately, it will increase the number of footfalls or clicks, leaving you with profits at an increasing rate.
Tax Preparation
Outsourcing tax preparation and filing activities save time. Special skills are needed to prepare tax returns. A tax consultant helps in offloading taxes filing burden. With online accounting software, it’s easier to generate tax returns.
Business owner works tirelessly to saves money. However, outsourcing business activities by seeking expertise increase the opportunity for the business to thrive amidst stiff competition.
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