Tax law is very complicated, especially for small businesses. Employers are required to collect income withholdings from their employees, and there’s a self-employment tax for individuals who work for themselves. It doesn’t matter what type of business you’re operating (with employees or without, and even freelancing), the IRS demands that you pay. If you don’t pay you’ll face penalties and, in some cases, criminal charges.
The following lists the different types of taxes your business may have to deal with. Keep in mind, tax credits can help you lower your effective tax rate. The ADP SmartCompliance tax credits module has a database of more than 3,000 incentives and can help you claim and keep all the credits available to you. Achieving the lowest possible tax rate is complicated (less so when you outsource the effort), but the savings are worth it. At tax time, your business has two goals: be 100 percent compliant in order to avoid financial penalties/fraud charges and save money.