Operating an LLC in Texas can be a great way to manage your business, but it’s important to understand the taxes you’ll need to pay. In this blog, we’ll discuss the different types of taxes LLCs in Texas will be subject to. We’ll also talk about when these taxes need to be paid and what steps you can take to ensure that you remain compliant with Texas law.
Franchise Tax for LLCs in Texas
The most common tax that an LLC in Texas will be responsible for is the franchise tax. This tax is calculated based on a company’s total annual income, minus any deductions allowed by law. The amount of franchise tax due depends on how much money your business makes during the year; businesses with higher gross receipts will owe more than those with lower gross receipts. The good news is, generally no state taxes will be due if you are under the 2022/2023 No Tax Due Threshold of $1,230,000.00. For small businesses or businesses just opening, this is a huge advantage!
Sales Tax for LLCs in Texas
LLCs operating in Texas are also subject to sales tax. Sales tax applies whenever an LLC sells a product or service (with some exceptions). The amount of sales tax due depends on where the sale takes place; each state has its own rate and may also have certain local taxes as well. It’s important to note that if you make sales outside of the state of Texas, you may still need to collect and remit sales tax depending on where those sales occur.
Employer Taxes for LLCs in Texas
If your LLC employs workers, then you may also need to pay employer taxes such as Social Security and Medicare taxes (also known as FICA taxes), federal unemployment insurance (FUTA), and state unemployment insurance (SUTA). These taxes are generally deducted from employee wages; however, employers must match these amounts when filing their returns each quarter. Employers must also withhold federal income taxes from employee wages and submit them periodically throughout the year via Form 941.
Tax Conclusion:
There are several different types of taxes that an LLC operating in Texas may need to pay including franchise tax, sales tax, and employer-related taxes such as Social Security/Medicare taxes, FUTA, and SUTA. It’s important to understand which types of taxes your business will be responsible for and when they should be paid so that you can remain compliant with applicable laws and regulations. If you have questions about paying your business’s taxes correctly or want help filing your returns correctly every quarter or year, consider working with a qualified accountant or professional who specializes in small business accounting services. Doing so can help ensure that your business stays up-to-date on all its obligations while reducing stress associated with filing taxes correctly every time.
As an LLC operating in Texas it’s important that you understand which types of taxes are applicable and how they should be paid so that your business remains compliant with all applicable laws and regulations. While paying these fees might seem daunting at first glance, there are plenty of resources available online as well as knowledgeable professionals with Moster Craft, P.C. who can help guide you through the process every step of the way so that you don’t have to worry about being subject to any penalties or fines due to incorrect filings or late payments down the line. By researching thoroughly before filing any returns or making any payments related to taxation matters, you’ll be able to ensure that everything is handled properly from start-to-finish now and into the future!
