How Washington Business Taxes Work
Washington Business Tax
Washington has a business and occupation tax, sales tax, and use tax that affect most businesses in Washington State. The Washington Department of Revenue is the agency responsible for administering and collecting these taxes from you.
What is the Washington B & O tax and how does it affect my new business?
It is possible to declare your income into different categories. What this means is that most Washington businesses fall under the 1.8% of your gross income tax rate. So roughly $15 for every $1000 of income. That may sound high to some of you, but let’s say you lived in Idaho where there’s 8% personal income tax. You’ll pay a CPA to file your tax return with the IRS and pay somewhere between 20-25% to the IRS, and then pay another 8% to the Idaho Department of Revenue. If you have a
profitable business, it will be way cheaper to pay gross tax than paying 8% of your net income.
If you have a small business, there is a tax credit for you. One of the best things about Washington State. It basically comes out to about your first $42,000 of gross income is tax free, and it’s on a sliding scale after that to about $55,000 to the full 1.8%.
The technical details on the small business tax credit are: $71 for monthly taxpayers, $211 for quarterly taxpayers and $841 for annual tax payers.
When you file your business license application. they will probably automatically put you into the quarterly filing category. If you want to request that to be monthly or annually, you can call the Department of Revenue at: 509-327-0200 .
How do I know how often I will need to report my Washington business taxes?Source: www.washingtonregisteredagent.net