Types of Business Tax Forms You May Have to File In Vermont

If you are a business owner based in Vermont, there are usually five basic categories of taxes that you should be aware of, even if it’s only the basic information. These categories are income taxes, estimated taxes, self-employment taxes, employment taxes, and sales taxes.

According to the IRS, any legal business must file an annual income tax return, with the only exception being partnerships. This is a given across the board, as it applies to personal income. You may also have to make tax payments every quarter, if you receive extra income besides your business, such as interest, alimony, self-employment income, etc.

Meanwhile, if your estimated payments are less than the annual tax liability, you will most likely end up being penalized by the state. When it comes to self-employment, these taxes apply to sole owners, general partners, and members of LLCs. There are applicable employment taxes if you have workers on the payroll.

And finally, sales tax refers to the taxes that are placed on any products or services that you sell and must be remitted to the state of Vermont. For instance, there is a meals and rooms sales tax that must be applied if you intend to run a business that sells meals or alcoholic beverages and when renting a room.

When Are PayRoll Taxes Applicable for Businesses in Vermont?

If you have people working for you, you may need to go through the tedious and confusing puzzle that is handling payroll taxes. This usually involves withholding taxes from your employees’ final paycheck and sending the withheld sum to the IRS. You may also end up having to pay other kinds of taxes based on how much money you pay your employees.

Moreover, you may be obligated to pay out payroll taxes on the income made from the business. There are usually laws that determine whether someone is entitled to payroll taxes, but anyone who you direct and control the way they work can be considered an employee. Even part-time workers are subject to it.

Otherwise, they may be recognized as an independent contractor, in which case they would not have to be subjected to payroll taxes. However, keep in mind that if you end up classifying a worker as an independent contractor inaccurately in an attempt to withhold taxes, the IRS could impose penalties on you.

What Defines Personal Property Tax in Vermont?

Personal property taxes are imposed across almost every state. In Vermont, these personal property taxes apply to all real estate properties that you may own that produce income. This not only includes tools and equipment, but it also includes whatever else is inside your rental homes, furniture included.

If you own this type of property, you will be legally required to file an annual tax return and report whatever tax you owe and each state - Vermont included - has its specific forms to fill in this respect. Moreover, when reporting values, the county provides tables that you can use to estimate value based on the age and useful life of the property.

If you end up subject to these property taxes within the state of Vermont, the IRS permits you to claim a tax deduction on your federal tax return. But, for that to happen, the IRS will usually need you to meet specific requirements, and it doesn’t matter how your state classifies the tax.

Easier, Quicker, Safer eSignature Solution for SMBs and Professionals

No credit card required14 days free