If you are a Missouri small business owner, you already know that to have a thriving business, you need to run a legally compliant business. One of the most important parts of keeping your business legally compliant is paying your taxes at the federal, state, and local levels. But we know that keeping up with various tax obligations can cause anxiety for even the most experienced entrepreneurs. That’s why we’ve put together a guide on state taxes for Missouri small business owners. Read on to learn more about the types of taxes you might face, how and when to pay them, and which of our products and services can make your life easier when tax time rolls around.
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Step 1: Establish your Missouri business’s corporate income tax obligations
How much you pay in state taxes depends a lot on your business’s structure. The state of Missouri taxes many corporations by taking a percentage of whatever taxable income a corporation makes in a tax year. The Missouri business tax rate for corporate income is normally 4%. Most corporations must pay these taxes by the 15th day of the 4th month after a tax year ends.
If you aren’t running a standard C corporation, your business is probably a pass-through entity. In general, pass-through entities don’t pay taxes on their income, but the owners and members of pass-through entities pay personal income taxes on their share of the business income. Pass-through entities include:
- S corporations
- Limited liability companies (LLCs) that aren’t treated like corporations
- Certain partnerships
- Sole proprietorships
Although a pass-through entity doesn’t pay a business income tax, many S corporations and partnerships need to file informational returns. Normally, Missouri informational returns are due by the 15th day of the 4th month that follows the close of the business’s fiscal year.
Step 2: Determine your Missouri business’s employment taxes
In general, enterprises that conduct business in Missouri and have employees have to pay withholding taxes. Many know withholding taxes as employment taxes. These are tax funds withheld from each employee paycheck to pay for their personal income tax liabilities. The rates for these Missouri small business taxes depend on how much and how frequently each employee gets paid. The rate normally ranges from 1.5% to 5.4%.
Just like the withholding tax rate fluctuates with the amount of wages you pay your employees, so does the due date for you to file a return and pay withholding taxes. The withholding tax due dates for many businesses are as follows:
- For businesses in general — you normally file returns and pay taxes by the last day of the month that follows each of your fiscal quarters
- For businesses that withheld more than $50 of wages for at least two months in the last year — you might have to submit monthly returns and payments by the 15th day of the months following the first two months of the quarter, and by the last day of the month following the last month of the quarter
- You might have to submit yearly returns and payments by January 31 of the following year for businesses that withheld less than $100 in each of their four preceding quarters
These thresholds and payment due dates can be subject to change. It’s a good idea to regularly check on your tax obligations and deadlines to stay compliant.
Step 3: Establish your Missouri business’s additional state tax obligations
Income and withholding taxes are some of the most prominent issues many of us think of when we think about business taxes. However, your business could be subject to several more tax obligations. Other common Missouri business taxes you might have to pay include:
- Sales and use taxes
- Franchise taxes
- Unemployment taxes
- Excise taxes
Your obligation to pay many of these taxes depends on the nature of your business and how you run it.
Sales and Use Taxes
If your business sells tangible, personal property, provides a taxable service, or allows others to use tangible, personal property — you likely have to collect and pay sales and use taxes. The tax rate is 4.225%, and your filing due date depends on the amount of tax you collect.
You normally file your tax returns according to the following schedule if you’re collecting state sales and use taxes:
- If your business collects $500 or more in state sales and use taxes per month, you’ll file your returns monthly — filing by the 20th day of the following month, or by the last day of the following month when reporting on quarter-ending months.
- You’ll file your returns quarterly if your business collects $500 or less in state sales and use tax per month — filing by the last day of the month that follows each quarter’s end
- If your business collects less than $200 in state sales and use taxes per quarter, you’ll file your returns yearly — filing by January 31 of the following year
If any of your filing due dates land on a weekend or holiday, you have until the next business day to file your return.
Some states require businesses to pay franchise taxes for doing business within the state. Missouri has not charged corporations for this tax since 2015.
In many cases, a Missouri business with employees needs to pay unemployment taxes to help the state pay out unemployment benefits to the businesses’s eligible former employees. Your tax rate to pay for these benefits depends on many factors, such as:
- The age of your business
- Unemployment claim history
- Tax history
- Taxable payroll
Most new businesses currently pay a 2.376% tax rate. New nonprofit businesses pay a 1% tax rate. If your business is an “experienced business,” your tax rate could range from 0% to 9%. You file your reports and make your payments between the first and last day of each month that follows the end of each quarter.
States normally charge excise taxes on the sale and production of certain products such as alcohol, cigarettes, and fuel. The Missouri Department of Revenue website provides detailed information on many of the excise taxes the state imposes. You can find specific information about state excise taxes on alcoholic beverages on the Missouri Department of Public Safety website.
Step 4: Prepare to file and pay your Missouri business taxes
Figuring out which taxes your business needs to pay can take up a lot of energy, but it’s unfortunately only a fraction of the battle. A crucial part of keeping your business legally compliant is submitting correct tax information and payments to the correct government entities. You typically pay most of your state business taxes to the Department of Revenue. You can pay many of your taxes through the Department of Revenue’s MyTax Missouri online portal. If you need to pay unemployment taxes, you’ll pay the Department of Labor and Industrial Relations. This department allows you to pay using their UInteract online portal.
Before you send your tax reports and payments to a government agency, you want to make sure you got the numbers and relevant information right. This means that you’ll likely need to gather a lot of business documents to aid in preparing your taxes. Business documents you might need include:
- Payroll information
- Accounting records
- Legal documents
This isn’t an exhaustive list of documents you might need to get your taxes right, but it emphasizes how important it is to track your expenses and income.
While reading this information, you might get exasperated thinking about all the paperwork. We don’t blame you. Properly filing your taxes often requires gathering and organizing a lot of paperwork. But where do you find the time to do this while tending to other business needs? We can free up your time by helping you keep track of your important financial documents. Our ZenBusiness Money App can help you manage your invoices and payments, keeping them easily accessible for tax season.
Not sure how to stay compliant? Learn more about legal compliance for small business owners.
Do I need an accountant?
As a business owner, you might be used to handling a lot of business matters on your own. But it’s often too risky to handle your business taxes without professional help. The consequences of submitting incorrect business tax reports or payments can be devastating, and most small businesses need the help of a tax professional to avoid these consequences.
How can we help?
Preparing to pay your business taxes can be overwhelming, but there are ways to alleviate the stress. We offer services that can shoulder some of your preparation burdens and make the process easier. Our Worry-Free Compliance Service keeps your business documents in one place while we track filing deadlines and alert you when they are approaching. If you’re looking for information about federal taxes, head over to our page on federal taxes for small businesses.
Disclaimer: The content on this page is for information purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
- How much can a Missouri small business make before paying taxes?
In general, there’s no minimum threshold for paying corporate income taxes. However, some sources of your corporate income might be exempt from taxation.
- What percentage does a Missouri small business pay in taxes?
The percentage your small business pays in taxes depends on the nature of your business and your business activities.
- How does a Missouri small business pay taxes?
You can pay your small business taxes online or by mail. If you have more questions about how to file small business taxes in Missouri, you can reach out to the Department of Revenue or the Department of Labor and Industrial Relations.
- Do I have to file taxes for my small business in Missouri?
Your obligation to file small business taxes in Missouri depends on the characteristics and activities of your business. If you think you can claim an exemption, it’s imperative that you speak to a tax professional immediately.
Small Business Tax Information by State
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