Company Tax
Company tax is also known as corporate tax and is generally imposed by the federal and by most state governments. This kind of tax is vital to the existence of any business and all business owners know better than dodging this one. Any company doing business is subject to taxation laws of the country it works in. This knowledge is basic and there are more complex rules for each type of institution.
No matter what type of business entity you are holding, it is imperative that you and your company abide by the rules because serious problems can occur. Various people have faced litigation due to mistakes in tax filing and this problem occurs usually as a result of mishandled tax or imprudent tax planning. For most companies, this is a crucial matter that demands the expertise of professionals who normally deal with such issues, the tax accountants.
Business entities are obliged legally to keep records of financial transactions so they could yield a precise corporate tax return. The legal implications of incorrect tax returns can be overwhelming, at times forcing companies to suspend operations until the issue has been resolved with the government agency concerned. This should be taken crucially by all businesses because it is not enough that one conducts business operations and take for granted the legal obligations to the state. This is not about the state wanting to have a share of your earnings, but it is a way of the state to earn revenue to support government projects. In other words, the government acquires money from people because that keeps the government and the economy alive.
Company records on taxes must be well kept for at least six (6) years after the accounting period and they must be kept even longer if the accounts are surrendered late. Such records should include every original purchase expense document and sales receipt.
Companies should compute their own corporation tax liability, and the payment of this tax should be accomplished even without notice from the Inland Revenue beforehand. It is a must that such obligation is met before deadlines otherwise the company can face legal charges.
As one starts his business, he must be able to discern his tax obligations towards the state. To people without proper accounting background, this could be tough. Corporation tax is essentially a levy on your business’ profits. You will have to work on assessing how much your tax liability is, remit the exact amount of that levy, and deliver all necessary information to the internal revenue office on or before the designated time. That is how it is normally done, and all business people know that, at least the better ones do.
All these are enough reasons why a lot of people manning their business keep accountants by their company to deal with tax related function, something you may not want to learn the intricacies of or something you cannot insert in your tight schedule. If you cannot do the task, your only option is to hire an accounting assistant. The good news is many firms house competent accounting professionals with the certification and license to practice. Either you can browse the yellow pages or look online for qualified professionals.
The need for tax accountants should not be taken lightly because their presence in your company is vital to its existence. Their function in the business is too crucial to be ignored and passed on to someone less qualified. Their function, generally, is to make sure that you do not face litigation due to mishandled tax. In any case, assessment of the business and examining the trend must be done regularly to make sure you are paying just the right tax – not short, not too much.
