Not all inflatable businesses may have the luxury of hiring an accountant to handle their business finances. This can be expensive, and unnecessary depending on the size of your business and the level of your sales. However, whether your inflatable business is large or small handling the taxes for your business can be a bit tricky, and a critical component to running the business.
The taxes that you are required to pay and forms you need to file for your inflatable business depend on the type of company you have set up, whether it is a sole proprietorship, partnership, limited liability corporation (LLC), etc. Taxes also vary from state to state, and it is necessary that you familiarize yourself with your state’s tax laws.
Inflatable businesses set up as LLCs and corporations have more taxes to be concerned with than soles proprietorships and partnership. In addition, LLCs and corporations are required to file corporate taxes, sales tax, payroll tax, state tax, and even the employees themselves will be taxed. In general, it is advisable to have a finance professional handle this aspect of your inflatable business in this situation.
In most cases you will need to file quarterly estimated tax payments, both for federal and state taxes (if applicable). If your inflatable business is operating as a sole proprietorship, partnership, or S corporation, and you are anticipating to owe more than $1,000 in taxes for the year, estimated tax payments are generally required. This is done by estimating your quarterly earnings just prior to the close of the quarter. An accountant can help you to understand approximately what your income / tax ratio should be. You can also refer to the IRS’ form 1040-ES for assistance in calculating your estimated taxes.
For more information on estimated taxes visit:
Keep in mind that all business expenses are tax deductible. Everything from mileage to get you to and from a business engagement, to purchasing paper and ink for your company, can all be deducted from your taxes. It is critical that you keep solid documentation of these expenses so that you are protected should you ever be audited. Similar to your personal taxes, charitable donations given by your business are also tax deductible. Keep a record of this, and be sure to get a receipt.
The following is a great resource for understanding and adhering to tax guidelines for your business:
If you do receive a sizable return at the end of the year you will need to go back and check your formula for calculating your taxes. Keep in mind that this is not in fact “bonus money” but is instead your hard-earned money over the course of the year that the government has been collecting interest on. Reversely, if you wind up owing a significant amount you need to double-check your numbers and correct this for the subsequent year. An accountant can easily help you to fine tune your formula for determining your estimated tax payments.
Navigating the tricky world of the taxes can be a challenge, and mistakes can be very costly to your business. Whenever in doubt seek out a finance professional to assist you, so that you can rest assured this is done right the first time.