When your cash flow is inadequate to pay all your business taxes, which ones should you pay first?
Your business is faced with a number of different types of taxes and government fees (which certainly feel like taxes). Some of the types that could apply to your business are personal property taxes on your equipment and inventory, real property taxes, sales taxes on items you sell, use tax on items you purchase, federal and state income taxes withheld from your employees paychecks, social security taxes – both the employer paid tax and the amounts withheld from employees paychecks, income taxes on the business, fees to the State of California (minimum $800 per year) depending on the form of your business (corporation, LLC, limited partnership) and county and/or city fees for business licenses. I am sure you can think of others as well.
So what should you do when you can not pay them all, in full and on time. First, pay the income taxes and social security contribution withheld from employee paychecks and the employer’s unemployment, social security and other contributions to the California Employment Development Department (EDD) and the Internal Revenue Service.
For more information on how Finkel Law Group can help you properly structure your new or existing business enterprise to take maximum advantage of state and federal tax laws, call us for a consultation at or (415) 252-9600 or visit us as www.finkellawgroup.com. We look forward to talking with you.