As a small business owner, you likely already know how important it is to pay your taxes on time. Failure to do so means that your business isn’t legally compliant. This could incur penalties, fines, and other possible negative consequences. It’s time consuming keeping track of all the necessary information to calculate the correct tax amount that you owe. Read on to learn about the types of state taxes you might face as a New York business owner and when and where to pay them. You’ll also learn how we can help make things easier when tax time rolls around.
For more comprehensive compliance help check out our Worry-Free Compliance Service, which can help you take care of regularly required compliance filings such as biennial statements.
Step 1: Establish your New York business’s corporate income tax obligations
Knowing how to file small business taxes in New York goes a long way in having a successful business. Although it’s confusing at times, we will help you through the process, describing everything you need to learn and consider. If your business is incorporated in New York or does business in the state, you have to file an annual New York state corporation tax return. Your business’s corporate structure will determine the amount of New York small business taxes you will have to pay.
The New York business tax rate for corporations is 6.5%. Other business structures are taxed as pass-through entities, where profit is passed through to the owners, who are responsible for personal income taxes on the money. Statutory business entities such as S corporations, limited liability companies (LLCs), partnerships, and sole proprietorships are pass-through entities that would not be subject to a corporation tax.
For most New York small businesses, corporate taxes are due by the 15th day of the 3rd month following the close of each tax year. For businesses with a tax year ending on December 31, the due date is April 15 of every year.
New York has an electronic filing mandate for certain businesses. For corporations, you must file all your tax payments electronically if you meet the following criteria:
- Prepare tax documents yourself, without the assistance of a tax professional
- Use approved e-file tax software to prepare your return, extension, mandatory first installment (MFI), or estimated tax payment
- Have broadband Internet access
If you file your taxes incorrectly pursuant to the mandate, you could face financial and legal penalties.
Step 2: Determine your New York business’s withholding taxes
Businesses are required to withhold and pay New York small business withholding taxes. These are personal income taxes on wages, salaries, bonuses, commissions, and other similar income paid to their employees. The current New York withholding tax percentage is a range from 4% to 8.82% of the qualified income, with a supplemental withholding rate of 9.62% for bonuses and commissions.
You must electronically file and pay your withholding tax returns. Filers of paper returns may be subject to penalties and delays in processing. You can find more information on how to e-file your withholding taxes at the Department of Taxation and Finance website.
Step 3: Establish your New York business’s additional state tax obligations
There are many other potential New York small business taxes that you might have to calculate and pay.
Sales tax applies to retail sales of certain tangible personal property and services. How often and where you file will depend upon your company’s locality. You can find the appropriate tax office by using the search tool on the Department of Taxation’s website.
Unemployment Insurance Tax
If your company has employees, it must pay the state’s unemployment insurance tax. The current new employer normal contribution rate is 3.4%. The highest rate that an employer will pay is 9.825%.
State Disability Insurance Tax
The New York State Disability Insurance Program allows employers to pay employees’ disability premiums. The law also allows an employer to choose to withhold .5% to 1% of employee wages up to $.60 maximum in order to offset the cost of providing benefits.
Step 4: Prepare to file and pay your New York small business taxes
The final step is to prepare your tax filings and file them along with your payments. You can file your business taxes with New York online, by mail, or in person by dropping off your tax filings along with a check or money order at your nearest tax office.
To stay organized and compliant with your New York small business taxes, you need to keep all your business documents organized and easily accessible. We can help you stay organized and keep track of your receipts, accounting records, legal documents, and business papers. With our ZenBusiness Money App, we make it easy for New York businesses to have a streamlined invoicing process to get paid quicker and keep track of important financial documents in one place.
Do I need an accountant?
Hiring a certified tax professional to help with filing your New York small business taxes is a smart move. By using an experienced accountant, you can be assured that you will take advantage of all the allowed tax breaks and that your tax filings will be done properly and on time.
How we can help
Our mission is to help small businesses like you with the red tape involved in starting and running a business. Our ZenBusiness Money App can help you to have an organized and profitable New York state small business. If you’re looking for information about federal taxes, head over to our page on federal taxes for small businesses.
No matter where your business is in its life cycle, we have the tools and services you need to help your business thrive.
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 New York small business make before paying taxes?
After deducting your business expenses from your revenue, whatever is left over is your business’s net income. This is the amount that is subject to New York small business taxes.
- What percentage does a New York small business pay in taxes?
The New York business tax rate is 6.5% of your company’s income after expenses.
- How does a New York small business pay taxes?
New York requires that you pay your taxes electronically.
- Do I have to file taxes for my small business in New York?
Yes. Every business that is incorporated in New York, located in New York, or does business in the state must file a tax filing, even if the business made no taxable income that year.