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Be assured, the IRS will get their's! Home business owners will rediscover what they already knew, taxes are inevitable! From self employment taxes to payroll taxes (if you have employees), home business owners, will find that taxes can not only be a necessary evil, but can dip deeply into any profits they may have made.

When starting your home business, you no doubt acquired a business license. At the end of the first year, the local government will send you a form requiring you to indicate your sales. This data is used to determine the amount of tax charged on your business license renewal. This varies by city and state government.

Items bought in the course of business used for resale, can be exempt from state and local sales tax. Contact your local government to receive a sales tax exemption application. Once you have completed the application and returned it to the proper authority, you will be issued a resale number. This number can be given to your suppliers to be listed as sales tax exempt.

If your state has a sales tax, you must charge your customer sales tax on items purchased. Customer who order from you and have the product shipped out of state are often exempt from sales tax. As a business owner, it is your responsibility to become familiar with sales tax laws from your state. Many local governments impose a sales tax above what is charged for state sales tax. If you find this overwhelming, considering obtaining the services of a CPA to ensure you are following the law.

Payroll taxes must be paid if you have employees. Social security, Federal Income Tax, Medicare, Workers Compensation,and State and Federal Unemployment taxes must be paid. Many home businesses are fortunate that they do not have the expense of employees and can operate their business themselves. Even in this instance though, business owners will be taxed on their income. Home business owners who have exceeded a certain amount of earnings will also be subject to self employment taxes.

Franchise taxes are applicable if the business you are running from your home is part of a franchise. Most home businesses do not fall into this category, as they are the birth of an idea of the owner. Those who do fall into this category should consult a CPA.

Taxes are dreaded, yet they will always be required. If the idea of figuring taxes and paying them to the correct authority makes your head spin, consult a CPA. CPA's will instruct you on the correct withholding, correct sales tax and ensure that you are following the law.

Learn more about this author, Angel Singleton.
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