Franchise Owners - April Makes You Think About Your Taxes

If you own a franchise business, then there are a few taxes that you are need to pay to make sure that your business runs smoothly and you dont have to face any legal / tax complications in the future. All the corporations that are supposed to file the Annual Franchise Taxes. The new franchise tax and fee law introduced in the year requires all the franchise businesses to pay a State Authority franchise tax and another franchise fee to the Secretary of the State every year before April . The franchise taxes are of two kinds: the organization taxes and the doing business taxes. The organization taxes are the taxes that have to be paid by franchises to exist as a corporation. On the other hand, the doing business taxes are ones that have to be paid by the corporations for having the privilege of doing business within the limits of the taxing authorities. The franchise taxes and the fees were paid to the Secretary of States, in the past, at the time of filing the annual report. With the new franchise tax law, the taxes are to be filed with the Department of Revenue after filling up the tax form K-, and the franchise fee is to be paid to the Secretary of States along with the annual report. There are a few things that you are supposed to keep in mind, even if your corporation is not a franchise, you are still supposed to follow the franchise tax. In this case, the franchise tax will be considered a business tax based upon the corporations assets. All corporations are supposed to file the franchise tax. In case no tax is due, the corporation has to give its information to the respective department. The franchise taxes have to be paid by the corporations including the domestic as well as foreign. They also include partnerships, some owners, and even Limited Liability Companies (LLC). Corporation also includes the trusts, joint stock companies, and other associations and organizations that operate for profits, have a capital stock, or shares, and special privileges. The franchise taxes are supposed to be filed a year in advance depending upon the assets of the enterprise as of the first day of the taxable period. Let us take an example: If a new business enterprise incorporates in April , , with its accounting period ending on December , , then, it is supposed to file its first franchise tax return on the th day of the th month from the time the taxable period begins. In this way, the date that will be due for the initial franchise tax return for that entity will be August , , depending upon the qualification date and the assets it had at the time of its incorporation. The business entities that have a net worth of $, or more in a state should pay a franchise tax of .% of their total net worth to the State Department of Revenue along with their taxpayers balance sheet. Various credit balances are deducted from the franchise tax to calculate the amount owed. If the calculated amount of tax is found to be less than $, then, your corporation is not required to pay the franchise tax for that period. Yet, filing is still important. (Remember talk to your legal and accounting advisor) Learn more about owning a franchise today : http://www.hjventures.com/franchise/franchise-glossary.html