How Much Do Small Businesses Pay In Taxes in Arizona?
Small businesses are the backbone of Arizona’s economy, with 99.4% of all Arizona businesses being small.
All companies, small or large, are required to pay taxes, and as a small business owner, it’s crucial that you know how much you owe.
It can seem like a complicated subject, but we are here to break it down for you.
This article is going to answer the question “how much do small businesses pay in taxes?”
Continue reading so you can be prepared when tax season comes around.
Corporate Income Tax
The good news for you as a business owner is the amount you owe in small business income taxes was reduced in 2022.
Instead of paying 3.5%, you’ll owe 3%.
You’re required to make estimated tax payments and you could be subject to a penalty if you don’t pay the required amount each quarter.
The Arizona Department of Revenue has a form called 140ES-SBI that you can use to determine how much each payment needs to be.
Withholding Taxes
Even as a small business, you will need to withhold taxes from your employees.
The amount that needs to be withheld will be on the employee’s federal Form W-2 in box one.
This amount is a percentage of the employee’s gross taxable wages.
Every employee must complete Arizona Form A-4 and if isn’t filled out, you as an employer will need to withhold 2.7%.
Transaction Privilege Tax
When you’re calculating the answer to “how much do small businesses pay in taxes,” you’ll need to include the transaction privilege tax (TPT).
As a company that sells products or provides services to consumers, you’ll be required by the state to pay the TPT.
The amount that you owe will depend on the type of business you have and where you are in the state of Arizona.
You also have to pay Arizona’s unemployment tax.
The state sets the amount, but if you are a new business, you’ll have to pay 2% for a minimum of two years.
Working With a Professional
It’s not required by law, but you should consider working with an accountant.
Paying business taxes can be tricky and as you continue to expand your company, it will only become more difficult.
Working with a professional accountant reduces your risk of filing late and filing incorrectly.
The last thing you want as a business owner is to pull money out of profits to pay late fees and penalties.
How Much Do Small Businesses Pay in Taxes?
Paying your small business taxes doesn’t have to be an overwhelming task and now that you know the answer to “how much do small businesses pay in taxes?”
It’ll be even less stressful.
Our best tip for small business owners is to stay organized all year round and work with a professional.
Don’t wait until tax season is upon us to get your documentation together. Give us a call today and a member of our team will be available to assist you will all your accounting needs.
It’s important to know how much your small business will need to pay in taxes. To avoid surprises and make sure you are prepared for tax season, it’s best to work with a tax professional. If you are looking for accounting tax services, Master Accounting is here to help you with your business taxes and payroll needs. Contact the experts at Master Accounting for a free initial consultation! Call (480) 456-4999 or submit your request online here.
