Thu 10 Mar 2016 | By:

Everything You Need to Know About Michigan Business Taxes

Small Business Taxes

When you’re incorporating a business in Michigan, your tax obligations run from the federal, state, and local levels. In addition, some of your Michigan business tax obligations are also influenced by the type of business structure you choose (LLC, Corporation, DBA, etc).

State and local taxes also vary from one state to another. Your business will be governed by these varying state and local tax laws so having sufficient knowledge of all of your Michigan business taxes and its accompanying requirements is the key to complying with all of your tax obligations.

Having a concise understanding of business taxes will save you from encountering future problems with tax governing agencies while saving a lot of money for your small business.

This guide then provides you with a summary of the common business taxes you are required to process.


Michigan Business Income Tax

Almost every state in the country charges a business income tax. In Michigan, a corporate income tax is levied, but there is no franchise tax in effect. Currently, a 6% flat rate is in effect for Michigan Business Income Tax. The income tax return is due every 15th of the fourth month at the end of the tax year.

Michigan Federal Tax Forms

As you comply with the requirements for Michigan business taxes, you need to fill out and submit various Michigan Federal tax forms. Although there are many sources from which you can download a copy of these tax forms, using the standard forms found in the Michigan Department of Treasury website ensures that you are using the correct ones.

Additionally, you can also find step-by-step instructions as to how to file these tax forms in the said source. As an alternative to the usual filing of tax forms in the actual office of the Michigan Department of Treasury or mailing it, you can apply for tax returns through the Michigan e-tax registration system.

Unemployment Insurance Tax

Aside from federal employment taxes you might need to file, you also have specific tax obligations if you have employees. If you have employees, you are required to pay for Michigan unemployment insurance tax and workers’ compensation insurance.

The Unemployment Insurance Tax is a subsidy for unemployed workers through no fault of their own, who are actively seeking employment. For more details on this tax obligation, you can head over to the Michigan Unemployment Insurance Agency.

Michigan Sales and Use Tax

The Michigan sales and use tax are both in effect, with each tax complementing each other. A 6% sales tax rate is collected for regular taxable items.

In lieu of the sales tax is the use tax. This tax type is imposed for goods bought outside of the state, but used inside Michigan. For more details on sales and use tax, you can check the Michigan Department of Treasury website.


Powerful Tools that Make your Michigan Tax Life Easier

Startup Tools and ResourcesUsing resources for a more convenient and efficient process of filing your tax obligations is the norm these days. Gone are the times when you have to do each and every task manually that take up much-needed time.

With the help of small business accounting tools and applications, your Michigan tax life will be significantly improved, giving you more time to focus on the actual day-to-day operations of your business.

Small Business Accounting Software

Small business accounting software continue to grow in popularity today because it offers more than just the usual accounting applications that are indispensable to a more efficient business. Small business accounting software these days in the likes of QuickBooksFreshBooks, and Xero host a number of tools, modules, and applications that let you automate various repetitive tasks.

From report generation, time and expense tracking, multicurrency features, mobile feature integration, and a number of other features, a small business accounting software is a necessity in any small business.

Please be advised that this is an informational guide. This is not legal advice nor should it be considered a legal document. For questions on the complexities of Michigan business taxes or for the legalities involved in starting a new business in Michigan, you can consult the expertise of a business lawyer.

About Ryan James

Half hardworking hermit, half avid adventurer, Ryan founded Startup Savant to simplify entrepreneurship and pay it forward by donating a portion of all revenue to support children's education via