Question by I Like Soul Music: Question about small business taxes?
My moms restauarnt has been doing quite well, often so busy its overwhelming. However, twice a month she is being charged taxes, state and federal, medicaid, social security etc and it amounts to nearly a thousand dollars a month. Combine that with payroll, rent, groceries, and all the other expenses it is draining her bank account each month to the point that we’re not sure if we can keep the restaurant open.
Its only 3 months old and this seem so strange. How can small businesses survive being taxed so heavily?
Are we being screwed (why, yes we are) but it is someone taking advantage or is this just normal government screw you?
Are their alternatives to paying these taxes monthly as she is.
I would really appreciate any advice. Its such a great restaurant and I cna’t believe its on the brink of closing because of Uncle Sam.
Answer by taxrep4u
Based on the info you provided, sounds like you are talking about sales taxes and payroll taxes. Not sure what you mean about being charged twice a month, as sales tax and payroll taxes are usually paid monthly, unless the business had a big payroll. Basically yes, you have to pay these taxes are required by the state and the IRS. If you do not pay them as required, the state and the IRS can close the business due to non payment. Believe me, if she is having trouble paying them now, imagine how hard it would be if she got behind, plus she would incur penalties and interest for last payment. Then she would owe even more. Hopefully you mom has a good bookkeeper or accountant to be sure is handling everything correctly. irs.gov has great info for for small business owners.
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