The amount in small business tax that you pay depends on several factors, starting with your business entity. For instance, sole proprietorships pay personal income tax and self-employment tax, whereas C corporations pay a corporate tax. After you determine your tax rate, you have to factor in things like payroll, sales tax, deductions and other benefits and obligations on a case-by-case basis. We wish it were simpler, but that’s why we’re here to help.

Business tax returns pose several challenges, particularly for small businesses. First, it can be difficult to discern which forms you need, especially if you have underlying issues that require amendments or extensions. Second, tax forms are riddled with complex government and financial jargon. Timing is another issue: it’s crucial to know which tax deadlines are pertinent to you and how extensions work.

And finally, accuracy. Subpar bookkeeping makes filing business taxes an extremely arduous process.

Also known as your Employer Identification Number (EIN) or federal tax ID number, your business tax ID number is a unique number the federal government uses to identify your business. It’s assigned when you incorporate. Sole proprietorships use the owner’s social security number as the business tax ID.

Different business entities have different due dates for their various obligations, and the exact dates change each year. The IRS website is a good place to start for a general idea of dates, but when you hire a Paro tax specialist, you won’t need to worry about any of them.

Business tax deductions, also known as “write-offs,” are qualifying expenses you can claim on your tax return to reduce your taxable income and therefore reduce the amount of tax you pay.

You need to report your expenses by category, such as travel, meals and entertainment, utilities, etc. There are specific rules around which expenses qualify and how much you can claim in deductions for each category. To save effort at tax time, keep track of relevant expenses by category all year long, and save your receipts for at least three years in case of an audit.

It means the business isn’t obligated to pay income tax. There are specific requirements to qualify for tax-exempt status, which usually applies to charitable, religious and social welfare organizations. See a complete breakdown of tax-exempt organization types from the IRS.