People who are thinking of starting a small business often have many questions related to the tax laws. They need to know how to license their business, how to collect and report sales tax, and what the taxes are for businesses. Today I would like to touch a little on this subject with regards to the Oregon small business tax laws.

Many people wonder whether they should incorporate the business in order to get tax breaks. You may have heard that this is the best way to save money. But most of the tax benefits fall to corporations that are earning big profits, and that have been established more than a few years. If you are a start-up business owner, you probably won’t have enough cash flow in the first year or two for this to be an advantage. One of the reasons a corporation helps keep its owners in a lower tax bracket is because the income can be divided between the corporation and the owners. Therefore, if the business is not making a solid profit, this is not advantageous to you. Also, if you decide to incorporate there will be state fees, legal fees, and accounting fees.

If you make a decision to hire employees, you will have to complete a combined employer’s registration form for the state of Oregon. You will be responsible for deducting payroll taxes, which include Withholding, Unemployment insurance, TriMet and Lane transit taxes, and Workers’ Benefit Fund. You will also report payroll taxes quarterly using OTTER, the Secure Employer Tax Reporting System (SETRON), or the Oregon quarterly form, and make an annual report to the state on form WR.

If you have questions about Oregon small business tax laws, you can check back here at our website, or refer them to the Department of Revenue at 1-800-356-4222.

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This entry was posted on Tuesday, December 5th, 2006 at 3:57 pm and is filed under Small Business Tax Laws, Tax Laws. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.