Federal Taxes

Federal Tax Identification Numbers

An Employer Identification Number, commonly referred to as an "EIN" is used much the same way for a business as a Social Security Number is for individuals. It is also known as a Federal Tax Identification Number. Not every business is required to obtain an EIN, but most are. A helpful questionnaire is available at the IRS website to help determine if one is needed for your business. Visit the following: http://www.irs.gov/businesses/small/article/0,,id=97872,00.html

Federal Excise Taxes

There are some forms of business on which the U.S. Government requires additional taxation. This will be a tax that you are responsible for collecting. This tax does not come out of your pocket. Typically it is added to the sale price of your product or service. Form 720. Quarterly Federal Excise Tax Return is used to file most federal excise taxes. Federal excise taxes can be broken into nine general categories of products and services.

They are:

  • Motor vehicle use tax (vehicles greater than 55,000 lbs. gross weight)
  • Retailers tax (certain types of fuels)
  • Retail excise tax on the sales of the following: heavy trucks/trailers, tires and tubes, recreation equipment (e.g. fishing/hunting supplies), firearms and ammunition
  • Air transportation tax (if you are transporting people by air, you have to collect this tax)
  • Communications taxes (e.g. on telephone or teletype services)
  • Wagering taxes
  • Taxes on U.S mined coal
  • Environmental taxes (imposed on petroleum products, various chemicals and hazardous wastes)
  • Alcohol, firearms, ammunition and tobacco taxes

Be sure to contact the IRS for complete information on federal excise taxes.

Federal Income Taxes

The amount and way you will pay federal income taxes will be dependent on the legal form in which your business is organized.

For a sole proprietor or a member of a partnership:

In either of these arrangements, you will be required to make estimated federal income tax payments and federal self-employment tax payments in advance. These individual payments are due in four installments. These payment deadlines are April 15, June 15, September 15 and January 15 for one whose tax year is the calendar year. Any amount left unpaid will be due April 15 of the following year. The form 1040-ES is used to file these taxes. 90% of your estimated tax must be paid during the course of the year.

For a corporation

The corporation is responsible for paying estimated corporate taxes if it has taxable income. These taxes can be due as soon as the fourth month of the corporation's first tax year. The proper form for filing these taxes is the Form 1120W. You must deposit these payments in a bank licensed to accept federal tax payments. The corporation will be issued a coupon book. These coupons will carry the corporation's tax ID number and are to be used with all federal tax payment deposits.

All forms necessary to file any of the estimated taxes mentioned above are available at your local IRS office. A coupon book will be mailed to you upon receipt of your Form SS-4 (the form filed requesting a tax ID number).

Employer Taxes

If you have employees, you are responsible for federal, state, and local taxes. Employment taxes include the following:

  • Federal income tax
  • Social Security and Medicare taxes
  • Federal Unemployment Tax Act (FUTA).

More information is available at the IRS website at http://www.irs.gov/businesses/small/article/0,,id=98862,00.html

Internal Revenue Service
2888 Woodcock Blvd.
Atlanta, GA 30341
Monday-Friday - 8:30 a.m.-4:30 p.m.
404-338-7962

or

Internal Revenue Service
401 W. Peachtree St. NW
Atlanta, GA 30308
Monday-Friday - 8:30 a.m.-4:30 p.m.
404-338-7962
http://www.irs.gov/businesses/index.html



NOTICE: The information contained within this publication is given for informational purposes only and should not be construed as legal or professional advice or assistance. Laws and information contained herein are from multiple sources and are subject to frequent changes. While this publication will be updated annually to capture those changes, you should consult a licensed professional when dealing with legal and financial matters regarding your specific situation. You should also verify the other information contained herein to be sure that you have the most current and accurate information.