According to the United-States Internal Revenue Service (IRS), businesses can incur four basic kinds of federal taxes. They include income tax, self-employment tax, employment tax, and excise tax. In addition to these taxes, each state requires that businesses pay individual taxes. In all cases, the way a company operates determines which taxes it owes.
IRS (Internal Revenue Service) requires that all types of businesses except partnerships do file an income tax return every year. A business that uses the holding method of paying taxes, pays the taxes because it generates income. A business that deposits estimated taxes can pay the due taxes when it files an income tax return. Also, some states require businesses to deposit income tax depending on the legal structure of the business.
IRS regulates self-employment taxes to contribute to social security and Medicare of a person who works as a freelancer. Some taxpayers state this as a benefit because the coverage provides them significant benefits for retirement, disability, and hospital insurance. Also offers benefits to the survivor in case of death of the payee. Self-employment tax varies from country to country.
In US 12.4 percent of that tax get registered to Social Security. The Social Security portion of the US tax is applicable only on the first $106,800 generated by a tax-payer. The IRS defines a freelancer person as “one who carries on a trade or business as a sole proprietor or independent contractor, a member of a partnership that carries on a trade or business, or a person who is otherwise in business for themselves.”
An employer should pay the employment taxes to cover Social Security and Medicare taxes, federal income tax withholding, and federal unemployment tax (FUTA) for its employees. This rule does vary from country to country.
The government of a country excise tax for certain types of businesses, depending on what do they sell or produce, the way of business they operate, the types of equipment and products they do use, and whether they do receive payment for certain services. These include environmental taxes, communications and air transportation taxes, fuel taxes, and taxes on the first retail sale of heavy trucks, trailer, and tractors, etc.