Tag: professional controller dallas

Advice from a Professional Controller: Small Business Taxes

Posted on by Bryan Polozola

As your small business begins to take shape and employees are hired, you immediately need to start considering employment taxes. Many business owners are incredible entrepreneurs, experts at growing and maintaining a thriving business, but many feel ill-equipped to handle small business taxes on their own.

 

NexGen Finance Solutions can help wade through the waters of small business taxes and employment taxes. Here are a few of the basics that should be withdrawn each month:

 

  • Federal Income Tax: Use the IRS withholding charts to determine what the appropriate amount of withholdings is each month. This figure is based on each employee’s annual income and is pulled from the employee’s paycheck each pay period.
  • Federal Unemployment Tax: This tax is taken into account by the employer at the rate of 6% of the first $7,000 of each employee’s wages. This may also be due at the state level, depending on what state your business resides in.
  • Social Security and Medicare Taxes: Social Security taxes and Medicare taxes are a burden shared evenly between the employer and the employee. Roughly half of the taxes come from the employee; half from the employer. More information can be found here for exact amounts due per employee for your small business taxes.
  • State Income Tax: These taxes are withdrawn in the same fashion as the Federal income taxes, depending on whether or not your state requires these to be withheld. State income tax is to be reported in the state of employment, not the state of residence.
  • Worker’s Compensation: While not a tax per se, workers compensation is also paid based on payroll. Guidelines for worker’s compensation vary from state to state, but the premise is the same across the board. As a business owner, you must either purchase a private insurance policy, enroll in a state-sponsored plan, or show that your business is stable and has the ability to be self-insured.

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If you are confused about employee tax withholdings for your small business, give Bryan Polozola at NexGen Finance Solutions a call today at 214-629-0100 or email us at bryan@nexgenfinance.com. As a professional controller, I can guide you through the process and provide the Dallas outsourced accounting functions your small business needs.

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