When it comes to incorporating a business in Maine, you should be on your toes with matters regarding your Maine business taxes. The IRS together with the state government has requirements when it comes to business taxes, and as a startup entrepreneur, you should learn the responsibility of completing the requirements for your Maine business tax.
Now, the key to completing all this is a thorough understanding of Maine business taxes, which of these taxes specifically apply to your business, what paperwork are required of each tax requirement, and what are the repercussions should you fail to comply with any of these taxes.
To give you a place to start in completing these tax requirements, this Startup Savant guide provides you with a run through of the five common business taxes in Maine and a short description of what each tax requirement is about.
Maine Business Income Tax is in effect in the state, but there is no additional franchise tax or privilege tax. Corporate income is taxed in a sequence of marginal rates ranging from 3.5% tax to over 8%. Also, income from the business that personally passes through you is also subjected to tax through your personal state income tax return.
When you’re starting the compliance process of Maine business taxes, getting all the standard forms for the paperwork is tantamount to a speedier and more convenient completion of the requirements.
To ensure that you have all the Maine federal tax forms and publications needed for your requirements in order, make sure that you must obtain the copies at the Maine Revenue Services. It is the one-stop resource to all tax forms, publications, and paperwork to get you started.
The Maine Unemployment Insurance is a state insurance program that provides temporary subsidy to unemployed workers through no fault of their own. As a business operating in Maine, you are required to pay Unemployment premiums provided that you meet all the criteria stipulated for the Maine Unemployment Insurance policy.
For more details on this tax requirement, you can check Maine’s Department of Labor.
Both Maine Sales Tax and Use Tax are in effect in the state of Maine. A Sales Tax is applicable and imposed for any property, product, or goods sold in retail within the State of Maine. The general rate for Sales Tax is 5.5% but there are exemptions to these general rate.
A Use Tax is imposed in lieu of the Sales Tax. This tax is only imposed when the Sales Tax has not been charged, meaning if a product or goods are purchased outside of Maine but will be used within the state, that item qualifies for a Use Tax.
The same rate for the Sales Tax applies to the Use Tax. For details on your Maine Sales and Use Tax, you can head over to the Maine Revenue Services to be sure you fully understand this requirement.
When it comes to the compliance of your Maine business taxes, paperwork does not only start at the time you need to complete the requirements, but rather all financial transactions of your business significantly plays a part in its completion.
That said, you might like to use savvy tools that help manage the financial aspects of your business. As compared to hiring professionals for help, a great alternative is to use a small business accounting software to manage your books.
Small business accounting software tools like Xero, QuickBooks, and FreshBooks are just some of the options that can help with your accounting and bookkeeping tasks. Tracking expenses and financial transactions within your business can also be easily done with the help of these applications.
In addition to those features, these applications also have other tools that can help you in running your overall business operations. A small business accounting software may not be mandatory, but can save you a lot of time while running your business.
Please understand that this guide is not for legal or tax advice purposes. It should only be used as an informational guide. For questions regarding the specifics of Maine business taxes or the process of starting a business in Maine, you should always seek the advice of a professional.