Small Business And Corporation Tax

Small Business Tax

Small business owners may be excited about new ventures, products and services, but there is one factor they should take very seriously to protect their assets: taxes. Filing taxes for a company is very different from filing as an individual and owners need to be aware of rules, regulations and eligible credits and deductions.

The main three components small business owners should focus on are employment taxes, self-employment taxes and tax accounts, according to the Associated Press. Unbeknownst to many employees and individuals, business owners are expected to make quarterly tax payments, referred to as estimated taxes, the AP reports. The same quarterly-payment requirement holds true for self-employment taxes. Consulting a tax services regarding how much to allocate towards these accounts is advised.

The large amount of information required during tax filing season also makes diligent record-keeping a priority among business owners. Purchasing record-keeping software or establishing a thorough database system is advised, the AP reports.

Small business owners, especially those who have never run a company before, may benefit most from meeting with a tax prepare or service to go over documents, compliance issues and other relevant filing factors.

Corporation Tax

A tax imposed on domestic and foreign corporations that are engaged in business activities, employ capital, own or lease property, or maintain an office in New York City.

Who is Subject to This Tax?
Who is Exempt from The Tax?

Who is Subject to This Tax?
Except for certain exemptions, the General Corporation Tax is imposed on all domestic and foreign corporations that are engaged in any of the following four activities in New York City during their calendar or fiscal year:

  • Doing business
  • Employing capital
  • Owning or leasing property, in a corporate or organized capacity or
  • Maintaining an office

New York City does not recognize federal or New York State “S Corporation” elections. S Corporations are subject to this tax. Furthermore, beginning in 1996, an association or publicly traded partnership that is taxable as a corporation for federal income tax purposes is treated as a corporation for the purpose of this tax.

If a corporation is not subject to the tax, but it has an officer, employee, agent, or other representative within the five boroughs, it must nevertheless file Form NYC-245, the Activities Report for Corporations.