Taxes and Business Credit
Posted February 3rd, 2009 by admin There are 4 general types of small business taxes: income tax, self-employment tax, employment taxes and excise tax. All small businesses are required to file annual income tax returns, with the exception of partnerships, which file an information return. A small business is required to pay small business tax as it receives income throughout the year, and may have to do this by making estimated tax payments. Small business owners that work for themselves pay self-employment tax. Employers have taxes to pay and forms to file for employees other than themselves. Excise taxes must also be paid for certain types of activities conducted, equipment used or products or services sold by the small business. A potential lender will review your tax return history as part of your business credit profile.
Business Credit and Tax Deductions
A part of a person’s or business‘ expenses that reduces income subject to tax. In some cases the interest on a business credit loan can be claimed as a tax deduction. Consult with your tax attorney or the IRS to find out if you are eligible.
According to Investopedia:
Investopedia explains Line Of Credit – LOC
The advantage of a line of credit over a regular (business credit) loan is that interest is not usually charged on the part of the line of credit that is unused, and the borrower can draw on the line of credit at any time that he or she needs to. Depending on the agreement with the financial institution, the line of credit may be classified as a demand (business credit) loan, which means that any outstanding balance will have to be paid immediately at the financial institution’s request.
Good luck and remember that business credit and small businesses mix well together. Consider doing that!
Sincerely,
Ilya Bodner
Small Business Owner
Initial Underwriting Group
Over the course of the last 5 years as an entrepreneur I have successfully launched, managed, and sold off several businesses. Each organization started has added some value to my understanding of the business world today. My philosophy has been that 9 things out of 10 that I try will fail, but that golden one is always worth the battle. In my experience that has proven to be the case and my successful businesses still operate today under the management of those whom I have sold off to. The latest project is Initial Underwriting Group, a corporation comprised of two concepts: 1) business credit building and 2) business loan underwriting.
Executive Exchange Lecture Series College of Business Administration Savannah State University James Scavo April 3 2008
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