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This document provides you with some basic information about New York State Business Taxes, the different types of businesses, and an overview of the filings for New York Businesses.
– 2011 Docstoc Inc. GUIDE TO NEW YORK STATE BUSINESS TAXES This document provides you with some basic information about New York State Business Taxes, the different types of businesses, and an overview of the filings for New York Businesses. We outline the procedures to follow and the forms to file in New York State, excluding New York City Tax forms and filings. 1. If you are starting a new business 2. If you are purchasing an existing business or assets from an existing business Further information may be found on the state’s website: www.tax.ny.gov © Copyright 2011 Docstoc Inc. 1 First, you will need to determine which type of business you will operate in New York State. The following list illustrates the types of businesses that exist in New York State: 1. Sole Proprietorship 2. Partnership 3. Limited Liability Company 4. Limited Liability Partnership 5. Corporation 6. S-Corporation More information can be found at http://www.tax.ny.gov/ Publication 20, New York State Tax Guide for New Businesses 1. A Sole Proprietorship is a business that is owned and operated by one person. Sole proprietors must report their business income and expenses, annually, on their federal and New York state personal income tax returns. For the Federal income tax return, this activity is reported on Schedule C of Form 1040. For New York State residents, the Sole Proprietorship annual income and expenditures are reported on Form IT-201; nonresidents must report this activity on Form IT-203. If you expect to owe New York state, New York City, or Yonkers income tax when you file your personal income tax return, you may be required to make estimated tax payments during the year. 1. Publication 94, Should You Be Paying Estimated Tax? 2. Form IT-2105, Estimated Income Tax Payment Voucher for Individuals 2. A Partnership exists when two or more persons join together to carry on a trade or business. For both federal and New York state income tax purposes, the term “partnership” includes a syndicate, group, pool, joint venture, or other unincorporated organization that is carrying on a trade or business. For New York state tax purposes, partnerships report their income on Form IT-204, Partnership Return, but do not pay any state income tax. 3. A Limited Liability Company (LLC) is required to file Form IT-204, unless it elects to file as an S-Corporation. If so, it is subject to an annual filing fee and must also file Form IT-204- LL (Limited Liability Company / Limited Liability Partnership Filing Fee Payment Form). An LLC is an unincorporated organization of one or more members, each having limited liability for the contractual and other liabilities of the business, formed for any lawful business purpose under the Limited Liability Company Law of New York state. 4. A Limited Liability Partnership (LLP) is a partnership that provides professional services and has registered as a Limited Liability Partnership under Article 8-B of the Partnership Law of New York State. For New York State tax purposes, A Limited Liability Company (LLC) is required to file Form IT-204, is subject to an annual filing fee. and must also file Form IT- 204-LL (Limited Liability Company / Limited Liability Partnership Filing Fee Payment Form). 5. A Corporation is a legal entity created by filing a Certificate or Articles of Incorporation with the state of New York and has a legal existence separate and distinct from its owners (shareholders). A domestic corporation is a corporation incorporated by or under the laws © Copyright 2011 Docstoc Inc. 2 of New York state. A domestic corporation may be formed by filing a Certificate of Incorporation with the New York State Department of State, under section 402 of the Business Corporation Law. A foreign corporation is a corporation incorporated under the laws of another state (other than New York) or foreign country. Foreign corporations that want to be authorized to do business in the state of New York must be authorized by the New York State Department of State. For more information visit: http://www.dos.state.ny.us/ A Corporation must file a corporate tax return annually and pay both federal and state corporation taxes based on the profits and/or activity of the business. 6. An S-Corporation is a Corporation that elects to file as a Small Business. Under the Internal Revenue Code (IRC), certain corporations may elect, for federal income tax purposes, to be S corporations. The federal election is made by filing federal Form 2553, Election by a Small Business Corporation, with the IRS. If the federal election is approved, the shareholders of the S Corporation are taxed based on the S Corporation’s Profits/Losses for the year. An S Corporation must file an annual Form CT-3-S and is subject to the New York State franchise tax on general business corporations (Article 9-A). All New York State Businesses should first apply for a Federal Tax Identification Number using Form SS-4. This form can be found at http://www.irs.gov/. Record-keeping should be kept regardless of the type of business you choose. Most businesses elect to keep their books on a calendar year, as this coincides with the reporting guidelines for Individual Income Tax Return reporting. The most common types of record-keeping are: 1. Cash method. In the cash method, revenues are recognized when a deposit is made into the business account. Expenses are recognized when they are paid out. 2. Accrual method. In the accrual method, both revenues and expenses are recognized at the time they are incurred, regardless of whether or not deposits have been made or bills have been paid. In general, filings for all types of business are as follows: 1. Corporate or self-employed returns, filed annually. 2. Estimated tax payments, filed quarterly. 3. Wage reporting returns, filed quarterly. 4. Metropolitan commuter tax returns, filed quarterly. 5. Sales tax returns, beverage returns, fuel use tax returns, and other related returns, as applicable. Listed below are a few examples of the Business Type Tax Forms and Deadlines that are used by most businesses, regardless of the type of business: Business Type Form Number Due Date © Copyright 2011 Docstoc Inc. 3 1. Sales Tax Return Form ST-100 20th day of March, June, Sept., Dec. 2. Payroll Tax Returns Form NYS-45 Last day of the month Apr., July, Oct., Jan. 3. Metropolitan Commuter Tax Form MTA Last day of the month Apr., July, Oct., Jan. The guidelines and forms listed above do not necessarily apply to every business, and some forms may not be included that would be pertinent to specific businesses. It is suggested, therefore, that you adapt this guideline to your particular business. Further information may be found at: http://www.tax.ny.gov/ Publication 20, New York State Tax Guide for New Businesses. © Copyright 2011 Docstoc Inc. 4
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