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Small Business Taxes at a Glance

Small Business Taxes

In the United states, a small business would be one that has few employees and is independently owned and operated. A small business is one that has a low number of sales, or a lower number or products produced when compared to large corporations. The smaller business tax would likely place a lower tax burden on these businesses, when compared to large corporations.

In the United States a small business is one that has fewer than five hundred employees or has less than seven million dollars in sales, depending on the specific type of industry.

Small businesses may have more allowable deductions than larger businesses, especially when it comes to deducting losses and expenses from the small business tax burden. The value of assets, as well as the net profit of the small business, are used to determine the tax burden.

In some jurisdictions, there are tax incentives granted to small businesses, as well as grants that can be sued to offset the tax burden. In the United States, less than fifty percent of new businesses are still open after four years,. By lowering the tax burden for these companies, they are more likely to survive.

Small business tax incentives may include credits granted when new jobs are created, especially in areas with high unemployment rates. In addition, companies that are just starting out,will likely have more allowable deductions because of the shear volume of materials needed to start a new business.

NEXT: Corporation Tax at a Glance

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