For every business, you have 2 types of taxes to pay every year, once a year:
First Tax Obligation
First, you have your Federal tax which is paid to the Federal government, otherwise known as the Internal Revenue Service (IRS). As a C-Corporation. The IRS imposes a flat tax of 21% of your profits as your tax you need to pay every year.
This means if you profited $100,000, you will need to pay $21,000 in federal taxes. This is shown in the documents you need to file which are the Form 5472 and the Form 1120.
Second Tax Obligation
The second tax that you are guaranteed to have is your state tax/franchise fee. Depending on what state you are incorporated in, you may have a state tax, or just a flat fee. This is covered in the post at the top more in depth but in short, if you are incorporated in a state with a franchise fee, this is a set dollar amount that you pay every year no matter how much business you do.
If there is a state income tax for businesses, it is a percentage of the profit that your company made, and it may be tiered.
Third Tax Obligation (Not applicable to all)
The third type of tax that may need to be paid is sales tax. Sales tax is applied to products, and is paid to states that you have an established presence in. You can read more about this in our post “Sales Tax Basics.”
That is the extent of your taxes for your business! Remember that taxes in the US are once a year, and it is especially important that you do them on time as there are penalties and fines that can be assessed to companies that file their taxes late. Bookmate helps companies submit their federal tax filing by doing all the necessary paperwork that comes with you federal taxes so you can focus on running your business. We do not at this time help people with their state tax or sales tax.
Next steps?
Book A Call! Not a Bookmate customer? Book a call with us, we can help determine what you need to have a successful tax season!
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