Taxes. Taxes. Taxes. Not a word a person normally likes to hear. Regardless, you must pay attention to taxes or your small business is going to take a hard hit. It can be easy to overlook the different categories your business is being taxed for and to bunch them all together, but you want to make sure you are paying attention to the details. If you don't, the unneccessary taxes that could have been prevented like healthcode violations and use taxes will begin to add up and you will be paying more than you bargained for when you began your small business.
Here are four taxes that your company MUST pay attention to:
1. Use Taxes. Usually, you'll have to worry about use tax when equipment is purchased out of state. It is typically assessed at the same rate as the sales tax that would have been owed had the same goods been purchased within the state. Pay attention to where you are buying your equipment and if you can, try to purchase within your state of residence. If you must purchase out of state just make sure you are paying attention to how often you do so.
2. Payroll Taxes. Payroll taxes are something you need to pay attention to. There are a lot of variable factors going into it, including the state you live in, how health insurance ties in, and many others. Want some tips on how to calculate payroll taxes? Check out the great calculators over at surepayroll.com: that http://www.surepayroll.com/calculator/
3. Sales Taxes. We recently had an employee move to Florida (we're based in Minnesota) and he's working remotely for us from there. Becuase we now have a physical presence in Florida, we're required to pay state sales tax. Had we neglected to do this - and had the state discovered it - we could have been faced with a serious tax bill. So make sure you understand state tax laws and their impact on your business.
For many field service businesses, states don't assess sales tax for service. But some do. Make sure you understand your state laws. There's a great primer here: http://www.bizfilings.com/toolkit/sbg/tax-info/sales-taxes/sales-tax-in-service-industries.aspx
4. OSHA Violations. Though not technically a tax, make sure your field service business is operating safely, because you don't want to end up like Timber Tanner Services, who were fined nearly $100,000 for serious and willful violations of safety law. So make sure you're operating safely so this "tax" doesn't get assessed to your business.
Taxes are a part of doing business. They help pay for the infrastructure that supports your business. They aren't always fun to pay, but it's a necessary evil. So make sure you understand your local, state and federal tax requirements so you aren't hit with an unexpected bill.
Not paying your taxes is a stupid thing to do. Wondering what other stupid things you might be doing? Check out our free eBook, 33 Stupid Things Contractors Do (and How to Fix Them), today!
