Taxes.

    Nobody likes to think of them, much less plan systems within their business operations to make sure local, state and federal taxes are paid.

    The Small Business Administration (SBA) provides some general insights that new business owners or long-term pros do not want to forget.

Choose Your Tax Year

According to the SBA, “most businesses choose their tax year to be the same as the calendar year. You select your tax year the first time you file for taxes, but you can change it later with permission from the IRS.”

• If you don’t have special accounting needs for your business, choose a calendar tax year.

• If you want your 12-month accounting cycle to end in a month that isn’t December, choose a fiscal tax year.

• If your business wasn’t in existence for an entire tax year, or you changed your accounting period, choose a short tax year.

If your business doesn’t have much reporting or bookkeeping, you might be required to use a calendar tax year. Check with the Internal Revenue Service (IRS) for detailed rules about tax years.

Determine Your State

Tax Obligations

The SBA notes, “your business might need to pay state and local taxes. Tax laws vary by location and business structure, so you’ll need to check with state and local governments to know your business’ tax obligations.

“The two most common types of state and local tax requirements for small business are income taxes and employment taxes.”

It is important to remember that a business’ tax responsibility is determined by the business structure.

“For example, corporations are taxed separately from the owners, while sole proprietors report their personal and business income taxes using the same form,” according to the SBA.

“If your business has employees, you’ll be responsible for paying state employment taxes. These vary by state, but often include workers’ compensation insurance, unemployment insurance taxes, and temporary disability insurance.”

Business owners may also be responsible for withholding employee income tax and are encouraged to check with their state tax authority to find out how much you need to withhold and when you need to send it to the state.

For more information on those specifics in Louisiana, visit the Louisiana Department of Revenue at revenue.louisiana.gov.

Determine Your Federal

Tax Obligations

“Your business structure determines what federal taxes you must pay and how you pay them. Some of the taxes require payment throughout the year, so it’s important to know your tax obligations before the end of your tax year,” according to the SBA

There are five general types of business taxes:

• Income tax

• Self-employment tax

• Estimated tax

• Employer tax

• Excise tax

Each category of business tax might have special rules, qualifications, or Internal Revenue Service (IRS) forms you need to file. Check with the IRS to see which business taxes apply to you.

“If your business has employees, you might be required to withhold taxes from their paychecks. Federal employment taxes include income, Social Security and Medicare, unemployment, and self-employment taxes. Check with the IRS (irs.gov) to see which taxes you need to withhold,” according to the SBA.

------------------------------------------------

Business Incubator Recruiting

Prospective Start-ups

The team at the Alliance Business Incubator located inside the SEED Center at 4310 Ryan St. is looking for candidates who may be interested in participating in the agency’s program.

If you have a business plan, interested in mentorship and assistance, the Business Incubator program may be an avenue to consider. For more information, contact Eric Cormier using the information below.

Eric Cormier is Senior Vice President of Entrepreneurship and Strategic Initiatives at the SWLA Economic Development Alliance/Chamber SWLA (Business Incubator). He can be contacted at 337-433-0977 at Extension 2221 or at ecormier@allianceswla.org.

 Eric Cormier