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When you run a business, you have to deal with various activities and business matters. One of the most crucial matters is business taxes. Filing for business taxes is important, and it can also be beneficial for your small business or startup.

But taxes are a complex part for small businesses or startups to handle, and it’s different from filing for personal taxes. It requires you to know various types of taxes, tax forms, and other information.

It becomes a more difficult task for you if you are a new business, which is establishing itself.
In this article, we will share all the information that you need to know so you can get started with your business taxes.

It is better to be prepared in a tax matter because it’s the best way of making the taxation process easy.
So let us dive deeper into the topic.

Different Types of Taxes

Income Tax

Income tax is what you pay on the income that your business earns. It is a tax on the payments your business receives from any source of income or sales of goods or services.

Self-employment tax

Self-employment tax is what you have to pay as a self-employed owner of a business to cover your medicare taxes and social security.

Excise Tax

Excise tax is for the businesses that are involved in specific goods or services like heavy trucks or tractors, fuel, or transportation.

Employment Tax

This tax is also known as payroll tax. The employment Tax is what you deduct from employees’ paychecks. The deductions are for federal income taxes, medicare taxes, federal unemployment taxes, and federal income taxes.

Sales Tax

Sales tax applies to your business if you sell goods and services. You have to calculate, collect and report sales tax, and it applies to the final sale of a product or service in the US. Moreover, there is no federal sales tax, but 45 states have a sales tax requirement.

Property Tax

You pay property tax if your business owns any land, commercial property, or real estate. It regulates on a local level based on the location of your business.

Types of Forms required to file for Startup and Small Business Taxes

Following are various forms based on the structure of your business

1. Form 1120- C-Corporations requires this form.
2. Form 1120S- S-Corporations requires this form.
3. 1099-MISC- It is a tax form for Sole Proprietors.
4. Form 1065- This tax form is for standard partnerships and multi-member LLCs.
5. Form 8832- This is a tax election form for an eligible entity to choose how it will be filed for federal tax purposes, a partnership firm, a corporation, or an entity not regarded as separate from its owner.
6. Schedule C- It is a tax Form for Sole proprietors.
7. Form 990/Form 990-PF- It is a tax form for nonprofit organizations (NGOs) that file as public charities or private foundations.

The time to file for your small business taxes

As a small business, you are required to pay taxes to International Revenue Service (IRS) four times a year. It means that you have to keep a track of four deadlines in a year to file for tax.
Moreover, whatever your business type is, you are liable to pay taxes if you owe income tax of $1,000 or more and the corporations are liable to pay quarterly taxes if they owe $500 or more taxes in their small business taxes.

Taxes based on Your Business Structure

Sole-Proprietorship Taxation

If a business has a single owner, and it is managed and operated by an individual, then it is called Sole Proprietorship. As there is a single owner of the business, filing for taxes is relatively simple in this structure.
In a sole proprietorship, you can report your business losses and income on your income tax.

It does not require you to file your business taxes on behalf of your business. So, your business profits are taxed at your income tax rate. Moreover, you are liable to pay self-employment taxes.

Partnerships Taxation

A Partnership is a business run by two or more owners. Most partnerships are called general partnerships, but there are other types as well, like limited partnerships and limited liability partnerships (LLPs). The business partners/owners that are part of the business must pay income taxes, self-employment taxes, and quarterly taxes.

Partnership businesses have to file Form 1065, which shows the income, gains, deductions, and losses from their operations. Moreover, the partnership businesses enjoy “pass-through taxation,” where the income is taxed on the business owners instead of being subject to corporate tax rates.

C-corporation Taxation

C-corporation is a business structure where the business is legally separate from its owners, and such businesses are subject to “double taxation.” The income tax form for C-corporations is Form 1120.

The C-corporations income tax rate is 21%, and the business shareholders are taxed on their personal tax returns after the profits are distributed among them as dividends. Moreover, the dividends of C-corporations are subject to dividend specific tax rate.

S-corporation Taxation

S-corporation is a business structure that elects itself to be treated as a pass-through entity for tax purposes. Similar to partnerships and sole proprietorships in S-corporations, the profits are taxed at the personal income tax rate. Each shareholder in this business structure reports business income and losses on their personal tax returns.

The form that S-corporations prepares is Form 1120S. The S-corporations divide their business income between salary and dividends like C-corporations. Similar to C-corporation, in S- corporation, the employee salary is subject to self-employment taxes.

Limited Liability Company

A business entity that keeps the owners legally separate from its debts or liabilities is a limited liability company (LLC).
The LLC owner has the liability to protect the corporation with the tax benefit of a partnership or sole proprietorship. LLCs are subject to Form 1065 for informational purposes each year.

An LLC is also subject to pass-through taxation, which is similar to partnerships. It means LLCs are not taxed twice like corporations and are subject to make quarterly payments on personal income tax forms.

Conclusion

It’s a wrap with startup and small business taxes. This article will help you in understanding the various taxes, different tax forms, and types of business structures, and taxation.
Taxes are crucial for your business, and as a business, you should understand all the nitty-gritty of business taxes.

Want advice, consultation, or support in your small business or startup tax matters?
VcourTs can assist you with an online mediation service so that you file for your taxes on time and reap benefits out of it.

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Introduction

The U.S. has been open for immigration for a long time. Immigration has expanded the economic opportunities, enriched the culture, and enhanced the influence of the U.S. in the world. Immigrants from different countries integrate into American society and become a part of their culture. Moreover, the immigrants with their skills in different fields complement the natives increase the productivity in different fields through their innovations and entrepreneurship.

It is a well-known fact that the U.S. is a nation for immigrants. Most of the Americans are descended from immigrants or immigrated themselves in the colonial era from Germany and England. In the 19th and 20th centuries, the immigrants came from Eastern Europe, Ireland, and Scandinavia.

In recent decades, most Americans are immigrants from Asia or Latin America.

Moreover, one out of four people residing in the U.S. is a first or second-generation immigrant. Immigration in the U.S. enriches it economically, socially, and culturally as a diversity of people reside here.

The Immigration Law

The immigration Law governs immigration in the U.S. This law is established by the federal government that determines who is allowed to enter the country and how long. The national laws concerning the immigration of citizens of the country are regulated by International law.

The four types of immigration status that exist in the U.S. are:

The U.S. Citizens

U.S. citizens are those people who are either born in the U.S. or those, who by the act of naturalization became permanent residents. Naturalization is a legal process where after three or five years, the non-citizen becomes permanent residents by a legal process. U.S. citizens can never be deported until and unless they committed fraud. They can work legally and receive public benefits.

Permanent or Conditional Residents

Permanent Residents or Legal Permanent Residents (LPRs) are those who hold a “green card.” A green card holder is a lawful permanent resident who gets authorization to work and live in the United States. The green card is proof that the person has permanent status. The green card can be obtained in different ways, either by being sponsored by a family member or a U.S. employer.

Those who have been married for less than two years before they obtained their green card are conditional residents. The conditional residency requires both spouses to jointly file to remove the condition within two years of receiving the green card. Otherwise, the green card terminates, and the partners can face deportation.

Non-Immigrants

The non-immigrants are those who are residing in the country legally but temporarily. For example, students and fiancées with F-1 Visa, business tourists with B1/B2 visas, or individuals who are granted temporary protected status are non-immigrants. Basically, the recipients holding these visas don’t intend to immigrate but reside for a temporary purpose. If an individual under this category has a fraudulent application or overstays or violates the terms of visa, then the legal status can change to undocumented.

Undocumented

The undocumented category includes those people who are in the country illegally or without any permission. It means they haven’t obtained permission to live in the U.S. They are not authorized to work and get no access to public benefits like driver’s license or health care. The person also has a risk of being deported as the deportation proceeding can start against them anytime. There are two conditions when a person becomes undocumented:

• When the individual overstays a legal temporary visa
• When the individual enters the U.S. without going through a port of entry.

Benefits of Immigration for America

There are many reasons why immigrants come to reside in the United States. The two prominent reasons are freedom and opportunities. They come for a better life and better work. Also, they get many benefits by shifting to the U.S. But it’s not just the immigrants who get the benefits. The U.S.  also has many benefits for immigrants. Let us check out these benefits.

• Boosts America’s Economic Growth

Immigrants are strengthening the U.S. economy by filling out key job positions in various U.S. industries, creating new product developments, filing patents, starting new businesses. The immigrants boost the growth of the economy and increase the productivity of American workers by offering their skills. They work in various sectors and expand the economy. Moreover, they attract investments and create new employment opportunities for natives. Even according to a study by International Monetary Fund, immigration increases GDP per capita in advanced economies.

• Immigrants Encourage Entrepreneurship

Most of the immigrants stay in America for the purpose of starting a new business. The better work opportunities and market lead them to try their luck in business. An immigrant is more likely to start a business in America as compared to a native citizen. According to a survey among the fortune 500 companies, 40% were founded by immigrants. It states well how immigrants encourage entrepreneurship.

• Immigrants Strengthen U.S. Workforce

The U.S workforce includes 17.4 % of immigrants. The immigrants bring new ideas and innovations to America. Also, according to a study, more than half of the high skilled technology entrepreneurs and workers working in Silicon Valley are immigrants or foreign-born. So the immigrants are adding value to their work and, by developing new products and ideas, they strengthen the U.S workforce.

• Immigration Maintains Demography in the U.S.

According to research, the number of U.S.-born parents and workers will decline and narrow down by eight million from 2015 to 2035. So the immigrants are the people who fill the blank spaces. Moreover, If there were no immigrants in the U.S., then it could experience a demographic decline. Without immigrants, the U.S. economy would lose its leadership role and dynamism in the global economy.

Conclusion

These immigrants embrace America’s culture of opportunities and freedom. The immigrants are assimilating into American society, and they are adopting the American culture and values. Immigration is what makes America dynamic. The U.S. immigration policy should progress more and welcome such immigrants to be a part of the U.S. economy to make it stronger.

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Covid-19 has impacted the world in many ways. It shattered businesses, people lost their jobs, many lost their loved ones, and some went into a state of depression due to Covid-19.

Covid-19 spared nothing, even the personal lives of people. One such impact of the pandemic was on the rate of divorce. Most of the married couples were seeking a divorce during the pandemic.

It was a prediction that the divorce cases would rise due to the pandemic, and it came out early in 2020.

In April 2020, the rate of people seeking divorce increased by 34% in the US. Moreover, the newly married couples who were married for five months or less were calling off their marriage at a higher rate. In 2019, the rate at which new couples were filing for divorce was 11% rose to 20% in 2020. The possible reason for the rise in divorce cases was Covid-19. So, it is clear that the pandemic made couples seek divorce.

So, the question arises that how did Covid-19 lead to a surge in divorces. Let us dive deeper and find out the answer to this question.

Reasons for the increase in Divorce cases during the pandemic

Financial Crises

Troubles in finances often lead to a troubled marriage. Many families faced a financial crisis during Covid-19. In the United States, managing finances is one of the leading causes of divorce. Most of the people lost their jobs as companies were shut, and there was no work, but to survive in the US, you have to pay the bills.

There are so many finances that the families had to cope up with like, food, rents, and other debts. So, this leads to an issue as spouses might question the spending of another partner end up in a dispute. Most of the family disputes are for and because of the money and would have lead to divorce.

Tensions of being Homebound

The feeling of getting stuck in a house when you can’t go out and have to stay in for 24 hours with the same person puts a person under a lot of frustration. It is the most common situation that most families faced during the lockdown, and when it’s about the couples, things get escalated. During the pandemic, most couples felt that they stuck with their partners and easily got annoyed by the other. The frustration comes out and turns into fights, and eventually, couples end up seeking a divorce.

Also, a lot of stress comes when there’s a lot of work pressure like doing the household chores, looking after kids, and work from home.

Lockdown increased the responsibilities of partners and put partners under pressure. Such issues escalate tensions and disputes and end up in a divorce.

The rise in Domestic Violence

During the lockdown, it was mandatory to stay in home quarantine for most families, and it increased the cases of domestic violence. There are so many factors like mental pressure, economic instability, exploitative relationships, and other pandemic-related stress that increased violent behaviors in either of the partners.

Also, it was a concern of most advocates that intimate partner violence can surge during the lockdown. Intimate partner violence can be physical, emotional, psychological, and sexual, and it saw a substantial rise as couples were in self-isolation with their partners.

The United States reported domestic abuse cases in individual states ranging from 21% to 35%.

Domestic violence is intolerable for victims, and in the pandemic, it became a prominent reason for the surge in divorce cases.

Realization Period during Pandemic

When things are going great in professional life, then people usually ignore personal issues. But in the pandemic, the people had a lot of time to rethink their relationship and introspect if they are happy or not.

Quarantine was a period of realization for many people to carry on their marriage any further or not.

Spending more time together is enough to understand the status of a relationship. Many couples ended their marriage after knowing more about their partners, their truths, habits, and other behavioral aspects.

As most people had no idea about their future, separating might be their option during the pandemic, and this was one of the reasons for the increase in divorce cases.

So these were some of the possible reasons that increased the divorce rate during the pandemic. There are still so many reasons unknown that lead to a couple filing for divorce.

Going through a divorce is difficult as there is a lot of emotional pressure on the couple. But divorce gives a chance to make a new start and move on in life.

Want to Speak about your Divorce or Family Matter?

At VcourTs, we offer mediation services to make your divorce filing process easy. We can handle your complex case and work on your behalf to spare you from all the stress. We find the best family law attorney for you to give you the right consultation on divorce matters.

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