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What Are My Tax Responsibilities as a Business Owner?

Greg Swanson

Owning a business means more than just making sales—it also means staying compliant with taxes. Knowing your tax responsibilities as a business owner helps you avoid fines and run your business smoothly.

Quick answer: You must pay income taxes, self-employment tax, possibly payroll and sales tax, and stay on top of quarterly filings and deductions.

Types of Taxes You May Owe

Most small business taxes include:

Income tax: Paid on business profits.
Self-employment tax: Covers Social Security and Medicare for sole proprietors and partners.
Payroll taxes: Required if you hire employees.
Sales tax: Required in most states if you sell taxable goods or services.

Tax Filing and Payment Deadlines

Most businesses need to file quarterly estimated taxes. Missing deadlines can lead to penalties. Use a calendar or accounting tool to track key dates.

Keeping Records and Claiming Deductions

Good bookkeeping helps you track income, claim deductions, and prepare for audits. You can deduct common expenses like supplies, home office use, mileage, and professional services.

Final Thoughts

Your business owner tax obligations may vary based on your business structure and location. When in doubt, talk to a tax professional to keep everything on track.

Updated: August 16, 2025

What taxes do small business owners pay?

Business owners may owe income tax, self-employment tax, sales tax, and payroll taxes if they have employees.

Do I need to pay taxes quarterly?

Yes, most business owners who expect to owe $1,000 or more in taxes must make estimated payments four times per year.

Can I deduct business expenses on my taxes?

Yes, common deductions include supplies, mileage, software, home office use, and professional services like accounting or legal help.

What happens if I miss a tax deadline?

Missing a deadline can lead to late fees, interest, and penalties from the IRS or your state. Set reminders or use accounting software to stay on schedule.