Why Bookkeeping Is So Important To Your Business

Small Business Bookkeeping is just about one of the most important responsibilities a small business owner will have. If you are making money from self-employment full or part-time you are considered a small business owner and the success of your business depends on creating and maintaining an effective record-keeping system. It does not matter if your business is a sole proprietorship, partnership, or corporation.

For tax purposes, you are required to keep good accounting records. Most importantly, the record-keeping system you use must be suited to your particular business needs. Bookkeeping is the first part of the accounting process, so the work of a bookkeeper and accountant often overlaps.

Difference between an Accountant and a Bookkeeper

The difference between an Accountant and a Bookkeeper is an accountant is a professional who handles the bookkeeping and prepares financial documents like profit-and-loss statements, balance sheets, etc. They perform audits of your books, prepare reports for tax purposes, and handle all the financial information that’s part of running your business. Bookkeeping focuses on recording and organizing financial data, while accounting is the interpretation and presentation of that data.

Benefits Of Keeping Good Records

The number one reason for keeping good records is to be in compliance with the law! Record keeping is also about understanding your business, now and in the future. Reasons why you should keep good records include:

1. Detail Tracking

Owning a small business will require you to track a significant amount of information, such as customers, sales, inventory, and expenses. Without a proper record-keeping system, tracking important details of your business may be impossible and can lead to you paying far more taxes than you should have.

2. Legal Compliance

As an owner, you may hold various licenses, permits, insurance, contracts, etc.. As an employer, you will be required to maintain and report employee payroll for tax purposes.

3. Tax Preparation (Federal, State, and Local)

You need good records to prepare your tax returns. Good records of your business financial transactions may be able to save you thousands of dollars. Your records must support the income, expenses, and credits you report. You need Supporting documents including sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks. Purchases, sales, payroll, and other transactions you have in your business will generate supporting documents.

Generally, these are the same records you use to monitor your business and prepare your financial statements. The financial statement may include income (profit and loss) statements and balance sheets.

  • An income statement shows the income and expenses of the business for a given period of time.

  • A balance sheet shows the assets, liabilities, and equity in the business on a given date.

Common Bookkeeping Methods

Manual Bookkeeping

With manual bookkeeping business accounting records are entered into a notebook or journal. You should have a basic understanding of the types of small business accounts there are and debits and credits. You will also have to decide what accounting method you will use to enter your transactions.

Accounting Software

By far computer accounting software is a great option for handling your bookkeeping needs. I could not live without it! You don’t have to worry about having extensive knowledge of accounting. Computers transfer the right numbers to the right accounts and make sure those numbers get put on the proper side of the account, the debit side, or the credit side.  

If you are starting your first business, you will quickly find out how important accounting software is to the success of the business. Accounting software keeps track of business financial records such as sales, expenses, inventory, and assets. The software delivers many advantages over manual systems, helping you to execute, manage, and track your critical financial transactions and related financial activities.

Small business accounting software will help to systematically organize your financial information, in a way that is easy to access. For example, if you want to know if a certain bill was paid, an accounting system should be able to tell you not only when the bill was paid, but the check number, and other details, such as details you may have recorded about the vendor. If you lose an invoice or a bill, information for sending duplicate invoices or bills can be found in the program.

You can also save money on tax preparation every year because your information will be well organized, not in manually-entered notebooks or in shoe boxes. You will also be able to generate specific income and expense reports as needed.


Spreadsheet software is commonly used in business to track information about clients, inventory, sales, employee timesheets, and much more.

Record Retention

Not only should small business owners keep good records, but owners should also know which of those records to retain and for how long. Record retention is the practice of keeping business and personal records over time.

The Internal Revenue Service (IRS) determines some record retention guidelines. Other retention requirements are legal in nature, such as what may be required by contract with those you do business with. Expert recommendations vary. Also, retention schedules vary by region. For example, a state may have a different statute of limitation for legal liability (lawsuits). Check with your attorney for legal requirements. Check with your accountant for financial-related requirements.

Three Key Points to Remember

1. As a small business owner you will need to track a significant amount of information. No matter the type, size, or complexity of your business, establish and maintain a proper record-keeping system that is suited to your particular business needs.

2. Regardless of whether you use a computer system, cloud-based computing, or a combination of these two, you will need to think about business accounting software.

3. Pick one record-keeping system or use a combination—but start now.

How To Set Up Your Small Business Accounting Records

The more you prepare your books, the easier recordkeeping will be.

1. Open a business banking checking account

Keep your business and personal finances separate. Opening a business checking account keeps your records organized. Check with your banking institution to find out what documentation you need to provide to open a business bank account.

Typically you would need the following information:

Social Security number
Employer Identification Number (EIN)
Business name
Business license
Organizing documents (e.g., articles of organization)

2. Decide on the accounting method you will use

Every business taxpayer is required to have an accounting method to report income and expenses. The two most commonly used methods are cash and accrual. Once you choose your accounting method, you must follow it consistently. Generally, you may not change your method of accounting unless you obtain permission from the IRS.


Due to its simplicity, the cash method is a popular choice for small businesses. To determine gross income, add up the cash, checks, and fair market value of property and services you receive during the year.

If you receive a check on December 28, 2011, but decide not to cash or deposit it until after December 31, 2011, you must still count the check as income in the year you received it.

Business expenses are usually deducted in the year they are paid. For example, you order office supplies in October 2011 and they arrive in December 2011. You send a check to pay for them in January 2012. Under the cash method, you should claim that business expense deduction on your 2012 tax return because that is the year you paid for the supplies. Certain businesses cannot use the cash method. In addition, special rules apply for the accounting of inventory.


With the accrual method, income is reported in the year in which all events that fix the right to receive it have occurred, and the amount can be determined with reasonable accuracy, even if income was received in a different year. For example, the accrual method calls for income to be reported when a service is performed. It doesn’t matter that the customer doesn’t pay until the following year.

Similarly, you deduct business expenses in the year the liability arises, regardless of when they are actually paid. Using the office supply example, under the accrual method, you may deduct the business expenses for supplies on your 2011 tax return, the year you ordered the supplies and they were delivered, even though you sent a check to pay for them in January 2012. You may deduct the expenses in 2011 because that is when you became liable for the expense


Hybrid accounting, is a mixture of accrual and cash-basis accounting. Like the cash-basis method, you record income when you receive it, and record an expense when you make a payment. Hybrid accounting uses both cash and accrual methods.

3. Determine how your business will get paid

Determine what kinds of payments you will accept from your customers such as:

Credit card
For instance if you have a business online your might use Paypal or Etsy payments to receive money from customers.

4. Set up a chart of accounts

A chart of accounts (COA) consists of the following five account categories:


Start by making a list of everything the business owns, owe, the methods you will use to receive money earned, and the expenses you expect to incur in the course of your business.

5. Keep good records of your income and expenses

Tracking expenses is a crucial part of accounting and in the long run it benefits you by reducing your tax obligation. When keeping a record of your income and expenses, be sure to hang onto the following:

Bank and credit card statements
Canceled checks
Proof of payments
Previous tax returns
Forms 1099 misc, 1099K, W-2
The more documentation you keep in your records, the better off your business and books will be. Organize accounting receipts and other documents by the month they occur.

6. Determine how you will record transactions

Manually recording transactions by hand is the most time-consuming option. And you should have a basic understanding of accounting before recording transactions in your books.

Hiring an accountant seems like a good option but it can get expensive for a small business on a budget.

Take advantage of accounting software and let it do the hard work for you. Free Accounting software such as GnuCash can be ideal for a small business on a budget.

7. Schedule a time to do your bookkeeping

Stick to a bookkeeping schedule a time when you will records your business transactions, daily, weekly or monthly. Don’t put off recording transactions to the last minute your will regret it!

Bookkeeping Startup Checklist

Proper record-keeping for small businesses makes the process easier and keeps you compliant with the law. It will also help you in the long run, to be prepared in case of an IRS audit. Most importantly, records can show whether your business is improving, which items are selling, or what changes you need to make. Good records can increase the likelihood of business success.

1. Open a business checking account

You should always use a separate business checking account for business to keep track of income and expenses only. Do not use a personal checking account for business

2. Identify sources of your income

Your records can identify the sources of your income. You need this information to separate business from non-business receipts and taxable from nontaxable income.

3. Keep track of your deductible expenses

Unless you record them when they occur, you may forget expenses when you prepare your tax return.

4. Keep track of your basis in the property

Your basis is the amount of your investment in property for tax purposes. You will use the basis to figure the gain or loss on the sale, exchange, or other disposition of property, as well as deductions for depreciation, amortization, depletion, and casualty losses.

The Type of Records You Should keep

The business you are in affects the type of records you need to keep for federal tax purposes. Your business records must be available at all times for inspection by the IRS. You will need all Documents to Support items reported on your tax returns. If the IRS examines any of your tax returns, you may be asked to explain the items reported. A complete set of records will speed up the examination.

Supporting Documents

Purchases, sales, payroll, and other transactions you have in your business will generate supporting documents.

Supporting documents include sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks. These documents contain the information you need to record in your books. It is important to keep these documents because they support the entries in your books and on your tax return. You should keep them in an orderly fashion and in a safe place. For instance, organize them by year and type of income or expense.

The following are some of the types of records you should keep:

  • Gross receipts are the income you receive from your business. You should keep supporting documents that show the amounts and sources of your gross receipts. Documents for gross receipts include the following:
    • Cash register tapes
    • Deposit information (cash and credit sales)
    • Receipt books
    • Invoices
    • Forms 1099-MISC
  • Purchases are the items you buy and resell to customers. If you are a manufacturer or producer, this includes the cost of all raw materials or parts purchased for manufacture into finished products. Your supporting documents should show the amount paid and that the amount was for purchases. Documents for purchases include the following:
    • Canceled checks or other documents that identify payee, amount, and proof of payment/electronic funds transfer
    • Cash register tape receipts
    • Credit card receipts and statements
    • Invoices
  • Expenses are the costs you incur (other than purchases) to carry on your business. Your supporting documents should show the amount paid and a description that shows the amount was for a business expense. Documents for expenses include the following:
    • Canceled checks or other documents that identify payee, amount, and proof of payment/electronic funds transfer
    • Cash register tapes
    • Account statements
    • Credit card receipts and statements
    • Invoices
    • Petty cash slips for small cash payments
  • Travel, Transportation, Entertainment, and Gift Expenses
    If you deduct travel, entertainment, gift, or transportation expenses, you must be able to prove (substantiate) certain elements of expenses.
  • Assets are the property, such as machinery and furniture, that you own and use in your business. You must keep records to verify certain information about your business assets. You need records to compute the annual depreciation and the gain or loss when you sell the assets.
  • Documents for assets should show the following information:
    • When and how you acquired the assets
    • Purchase price
    • Cost of any improvements
    • Section 179 deduction taken
    • Deductions taken for depreciation
    • Deductions taken for casualty losses, such as losses resulting from fires or storms
    • How you used the asset
    • When and how you disposed of the asset
    • Selling price
    • Expenses of saleThe following documents may show this information.
    • Purchase and sales invoices
    • Real estate closing statements
    • Canceled checks or other documents that identify payee, amount, and proof of payment/electronic funds transfer

Prepare your financial statements

You need good records to prepare accurate financial statements. These include income (profit and loss) statements and balance sheets. These statements can help you in dealing with your bank or creditors and help you manage your business.

  • An income statement shows the income and expenses of the business for a given period of time.
  • A balance sheet shows the assets, liabilities, and equity in the business on a given date.

Prepare your tax return

Last but not least, you need good records to prepare your tax returns. These records must support the income, expenses, and credits you report. Generally, these are the same records you use to monitor your business and prepare your financial statement.

10 Types of Accounts for Small Businesses:

Accounting is the process used to identify, record, and communicate finances and financial activities in businesses and organizations. Accounting is often referred to as the “language of business”. Accounting records and tracks financial transactions and business events showing what a business owns and what it owes others.

10 types of accounts for small businesses:

1. Cash

All your business transactions pass through the Cash account, often bookkeepers will use two journals, Cash Receipts and Cash Disbursements, to track the activity.

2. Accounts Receivable

If your company sells products or services and doesn’t collect payment immediately, you have “receivables,” or money due from customers. It is important that you track Accounts Receivable and keep it up to date and send timely and accurate bills or invoices.

3. Inventory

Unsold products must be carefully accounted for and tracked. The numbers in your books should be periodically tested by doing physical counts of inventory on hand.

4. Accounts Payable

accounts payable records what the business owes to others such as vendors. Good record keeping will help you to keep track of money going out and to pay timely payments and avoid paying someone twice! And possibly save you money since some business will offer a discount on timely payments,

5. Loans Payable

If you’ve borrowed money to buy equipment, vehicles, furniture, or other items for your business, this account tracks payments and due dates.

6. Sales

The Sales account tracks all incoming revenue from what you sell. Recording sales in a timely and accurate manner is critical to knowing where your business stands at a given point in your business.

7. Purchases

The Purchasing Account tracks any raw materials or finished goods that you buy for your business. This account is used in calculating “Cost of Goods Sold” (COGS), which is subtracted from Sales to determine your company’s gross profit.

8. Payroll Expenses

Payroll expense is the amount of salaries and wages paid to employees in exchange for services rendered by them to a business. The term may also be assumed to include the cost of all related payroll taxes, such as the employer’s matching payments for Medicare and social security. Keeping this account accurate and up to date is essential for meeting tax and other government reporting requirements.

9. Owners Equity

Owner equity tracks the amount an owner (or owners) puts into the business. Also referred to as net assets, owners equity reflects the amount of money an owner has once liabilities are subtracted from assets.

10. Retained Earnings

The Retained Earnings account tracks any company profits that are reinvested in the business and are not paid out to the owners. Retained earnings are cumulative, which means they appear as a running total of money that has been retained since the company started. This account is very important to investors and lenders who want to track how the company has performed over time.

The Five Basic Types of Accounts in Accounting:
  • Assets, what the business owns
  • Liabilities, what the business owes
  • Revenues or income, money earned by the business, usually through sales
  • Expenses necessary to run the business
  • Equity is liabilities, subtracted from assets = the business net worth
Basic Accounting Equation

Accounting is more about learning concepts and methods than about adding and subtracting numbers. If you understand the basics you’ll be well on your way to understanding accounting. There are a few basic accounting terms that are important to understand.

The first term is account

An account is a record in the accounting system used to collect and store business transactions.
Examples of accounts an organization may use are
…Office Supplies,…

Think of an account as a way to store like information. For example, if you had a large container of fruits, oranges,
apples, and peaches to sort, each type of fruit would be sorted into a different carton that would represent its own account.

You would have one account for each type of fruit. After you had emptied the large container of fruits by sorting each fruit
into its carton, or account, you could then total the amounts in each account. Then, you would know how many oranges,
apples, and peaches, are in each account and could easily determine the cumulative amount of all accounts.

The Second Term is Transactions

Another important term is “transaction”. Transactions are events that effect an organization financially or cause some kind of financial change. Examples of a transaction that an organization might record in their accounting system are the purchase of office supplies such as paper, or a payment to the utility company for the prior month’s electric bill.

The Basic Accounting Equation is

…...Assets……equal Liabilities……plus Equity.
This equation represents the relationship between these three categories. This basic equation guides organizations when
recording and reporting their financial transactions. If you are new to accounting it is important to memorize this
fundamental concept.

Assets, liabilities and equity

Assets, liabilities, and equity are 3 accounting terms used to identify what an organization owns and what it owes others.

Assets are an organization’s resources or what it owns. (e.g., accounts receivable, inventory)

Liabilities are claims on the organization or what it owes others. (e.g., accounts payable, loans)

Equity or capital, which is also referred to as net assets. Equity is what remains after all liabilities or debts of the organization are paid. If you take the organization’s total assets and subtract its total liabilities you would then know how much equity remains.

This basic equation provides a way to measure a company’s profitability or lack of profitability. It also states assets must always equal liabilities plus equity. In accounting, this equation should always be followed and the rules of the equation should never be broken.

Debits and Credits

Debits and Credits

Debits and Credits are apart of The Accounting Equation. Transactions are entered using debits and credits. Debits and credits can be the most confusing part of bookkeeping for beginners. Assets equal liabilities plus owner’s equity. Debits equal credits. Debits and credit increase and decrease account balances. The total debits must equal the total credits. This method provides a check and balance system.

To keep a scale in balance, items of equal weight must be placed on both sides of the scale. The accounting equation works much in the same way. Equal values of a transaction must be placed on both sides of the equation using debits and credits to keep the equation in balance. Also, if the transaction affects only one side of the accounting equation, the effects of the debits and credits would cancel each other out.

Debit amounts are always entered on the left side of an account Credit amounts are always entered on the right
side of an account.

Note: The terms debits and credits by themselves do not mean decrease or increase. In accounting, these terms must be associated with the account types to have meaning

For example: on an asset account, cash is debited. It’s increased. In an owner’s equity account, capital stock is credited. It’s also increased. There is both a debit and a credit for the transaction, and we have increased accounts on both sides of the accounting equation by an equal amount, thus keeping the accounting equation in balance.

To understand the relationship between debits and credits, the various accounts, and the accounting equation, when cash is borrowed from a bank, cash is increased with a debit, and notes a payable liability is increased with a credit.

It’s crucial that each debit and credit transaction is recorded correctly and in the right account. Otherwise, your account balances won’t match and you won’t be able to close your books. To enter transactions correctly it’s important to know if a debit or credit increases or decreases the account’s balance. Learning the normal balance for each account type will help you with this process.

Account Category Normal Balance

Account typeDebit . .Credit

Entering Transactions and Preparing Financial Reports

Everything is recorded in a journal using debits and credits. Two different methods used in bookkeeping to enter your business transactions are single-entry bookkeeping and double-entry bookkeeping,

Single-entry Bookkeeping

With single-entry bookkeeping, you enter each transaction only once. If a customer pays you a sum, you enter that sum in your asset column only. This is not a good method for small business accounting unless your business is simple— say you work out of your home, and the business does not use any equipment or have inventory and you do not many cash transactions, you might consider single-entry bookkeeping, But it is not recommended.

Single-entry bookkeeping gives a one-sided picture of transactions recorded in the cash register. In double entry, changes due to one transaction are reflected in at least two accounts. In a single entry, there is no method for error correction or detection.

Double-entry Bookkeeping

Double-entry bookkeeping on the other hand is an accounting technique that records a debit and credit for each financial transaction occurring within a company. … Companies benefit greatly from using double-entry bookkeeping because it aids inaccurate financial reporting and reduces errors and fraudulent activity.

Double entry, states that every financial transaction has equal and opposite effects in at least two different accounts. Using debits and credits as an example of double-entry accounting, if you were going to record sales revenue of $1200 you would need to make two entries: a debit entry of $1200 to increase the balance sheet account called “Cash” and a credit entry of $1200 to increase the income statement account called “Revenue.”

Recording Transactions

To record a transaction, you must first determine the accounts that will be debited and credited.  For example, imagine that you’ve just purchased new equipment for your business. You paid $500, in cash for the equipment.

The transaction will affect two accounts:
Cash (an asset account) and
Equipment (an asset account).
Because you’re decreasing your cash and increasing your equipment, you would record a $500 debit (on the left) for the equipment account and a $500 credit for the cash account (on the right).

When you tally up account debits and credits—often at the end of the quarter or year—the totals should match. This means that your books are “balanced.”

Balancing The Books

Balancing the books occurs at the end of the period, you’ll “post” the debit and credit entries to the accounts themselves in the general ledger and adjust the account balances accordingly.

For example, if over the course of the month your cash account has had $4,000 in debits (increases) and $5,000 in credits (decreases), you would adjust the cash account balance by a total of $1,000 (as a decrease). Follow this method to adjust the balances for each account in your ledger. At the end of this process, you’ll have what’s called an “adjusted trial balance.” When you combine accounts types, the adjusted balances should meet the accounting equation:

Assets = Liabilities + Equity

If two sides of the equations don’t match, you’ll need to go back through the ledger and journal entries to find errors. Post corrected entries in the journal and ledger, then follow the process again until the accounts are balanced. Then you’re ready to close the books and prepare financial reports. Always consult your account before making any changes to your records.

Financial Reports

Once the books are balanced the next step is to, summarize the flow of money in each account. Some of the most common financial reports created in bookkeeping are:

  • Balance sheet. This document summarizes your business’s assets, liabilities, and equity at a single period of time. Your total assets should equal the sum of all liabilities and equity accounts.
  • Profit and loss (P&L) statement. Also called an income statement, this report breaks down business revenues, costs, and expenses over a period of time (e.g., quarter). The P&L helps you compare your sales and expenses and make forecasts.
  • Cash flow statement. The statement of cash flow is similar to the P&L, but it doesn’t include any non-cash items such as depreciation. Cash flow statements help show where your business is earning and spending money.

Bookkeeping can take time away from your business and unless you’re experienced in accounting principles, bookkeeping can be a challenging task. Getting help—whether by hiring a bookkeeper, outsourcing to an accounting service, or using accounting software it will give you more time to focus on your business.

Who Has to Pay Self-Employment Taxes On Money Earned Online or Offline?

If you make money in self-employment online or offline including in the gig economy the money you make may be taxable. The “gig economy” is a relatively new term for a traditional way of earning a living: being paid on a per-job basis for work performed directly for a customer. Being hired to do a single short-term task, project, or job can be called a “gig.” This type of occasional work is part of what is now referred to as the “gig economy.” 

A Brief list of Examples of work in the  gig economy are:

  • Drive a car for booked rides or deliveries 
  • Rent out property or part of it
  • Run errands or complete tasks 
  • Sell goods online 
  • Provide creative or professional services
  • Provide other temporary, on-demand
  • Freelance work

People working in the gig economy use Digital platforms. Digital platforms are businesses that match workers’ services or goods with customers via apps or websites.

This includes businesses that provide access to:

  • Ridesharing services
  • Delivery services
  • Crafts and handmade item marketplaces
  • On-demand labor and repair services
  • Property and space rentals

Examples of Gig platforms connecting service providers with customers, or gig workers, are too numerous to list here, so I will only mention a couple of popular gig platforms. Etsy and Uber. Gig economy workers are generally classified as independent contractors, though California has been working on laws limiting this classification.


Generally, your net earnings from self-employment of $400 or more regardless of how you earn it, are taxable, and you are required to file a tax return even if it’s a side job, part-time or temporary.

Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. Your payments of SE tax contribute to your coverage under the social security system. Social security coverage provides you with retirement benefits, disability benefits, survivor benefits, and hospital insurance (Medicare) benefits.

Gig platforms may send forms to the IRS to report payments made to you. If they do, you should receive copies of the forms by January 31. These may include:

  • Form 1099-K, Payment Card and Third Party Network Transactions
  • Form 1099-MISC, Miscellaneous Incomes
  • W2 Statements

You must report income earned from the gig economy on a tax return, even if the income is:

  • Not reported on an information return form—like a Form 1099-K, 1099-MISC,
  • W2 Statements
  • Paid in any form, including cash, property, goods, or virtual currency

Taxes must be paid as you earn or receive income during the year, either through withholding or estimated tax payments. If you are in business for yourself, you generally need to make estimated tax payments. Estimated tax is used to pay not only income tax but other taxes such as self-employment tax and alternative minimum tax.

If you do gig work as an employee, your employer should withhold tax from your paycheck. If you do gig work as an independent contractor, you may have to pay estimated taxes.  If you are unsure if you are an employee or independent contractor ask. If you have a regular job you may be able to avoid making estimated tax payments on your gig income by requesting your employer withhold more tax from your employee paycheck.

If you don’t pay enough tax through withholding and estimated tax payments, you may be charged a penalty. You also may be charged a penalty if your estimated tax payments are late, even if you are due a refund when you file your tax return.


As a general rule in most cases, you must pay the estimated tax if both of the following apply.

  1. You expect to owe at least $1,000 in tax after subtracting your withholding and refundable credits.
  2. You expect your withholding and refundable credits to be less than the smaller of:
    a. 90% of the tax to be shown on your tax return, or
    b. 100% of the tax shown on your tax return.
    Your tax return must cover all 12 months.

Estimated tax payments are due four times a year:

  • April 15 for payment period January 1–March 31
  • June 15 for payment period April 1–May 31
  • September 15 for payment period June 1–August 31
  • January 15 for payment period September 1–December 31

State Business Taxes

You are also required to file annual state tax returns for your business with the State Revenue Office. Your state income tax obligations are determined by your business structure. For example, corporations are taxed separately from the owners, while sole proprietors report their personal and business income taxes using the same form.

If your business has employees, you’ll be responsible for paying state employment taxes. These vary by state but often include workers’ compensation insurance, unemployment insurance taxes, and temporary disability insurance. You might also be responsible for withholding employee income tax. Check with your state tax authority to find out how much you need to withhold and when you need to send it to the state.

Local Business Taxes

Depending on your business location and local city requirements, a local city tax return and a business privilege tax may apply. Check with your local city clerk’s office for full details on their tax requirements for small businesses doing business in the city where your business resides.