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By Henry Brown

When running a small business, one of the most important things that you need to consider is paying taxes. This is not the most exciting topic to think about but is crucial if you want your business to survive.

When you start your business, you must learn about taxes and ensure you have an in-depth understanding of what they are, why you have to pay them, how you work out your taxes and how you pay them. It can be complicated and overwhelming if you are a solopreneur, or just starting up your small business venture.

Tax is not a simple task to understand. The type and amount of tax that you pay will depend on where your business is located in the world, what type of business you run, how big your business is, how much profit you make, what business structure you choose, and much more. You may also have to consider local, state, and federal taxes.

If you don’t pay your taxes, if you get them wrong, or if they are late, your business may be subject to penalties and fines, which are not cheap.

As a business owner, one of the first things you should do is make sure you understand taxes and schedule the dates in your diary so you never miss a deadline.

To help you get started in understanding taxes, here are some top tips.

#1 Check your state tax laws 

Each state has its business tax laws, and they can be quite different. Some states have much higher rates of tax to pay, for example, Louisiana and Maryland. However, other states have no tax laws or are much lower, such as Nevada and New Hampshire. You should research the state laws before you start your business so you know what to do and how much you are liable for.

#2 Consider your business structure 

The business structure that you choose will also have an impact on the taxes that you have to pay because each has its own rules. You should work with an accounting firm to help you with your taxes, to ensure you are paying the right ones. When starting a business, you will choose a structure that will serve its growth, some of these may include:

-A sole proprietorship that is owned by an individual and remains unincorporated

-A partnership that taxes more than one individual based on the net income that the individual partners have a share of

-A limited liability corporation is taxed on the share of business net income

-A corporation that pays federal taxes based on the net earnings of the business at a flat rate of 21%

Depending on your goals, you should choose the business structure that best suits your business.

#3 Other taxes 

As a business, there are a variety of other ways that you may have to pay taxes. This may include:

-Income tax

-Payroll tax

-Self-employment tax

-Property tax

There are a variety of different taxes that you may have to pay, which is why you must educate yourself as early in the process as you can.

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Henry Brown is an online marketing executive. When he isn’t talking shop, he’s roaming the streets of London, uncovering the extra-ordinary in the ordinary.