It’s critical to comprehend the numerous taxes you can owe as a small business owner in Michigan. These levies may include, among others, property taxes, sales taxes, and income taxes. We’ll examine the taxes that small businesses in Michigan might anticipate paying in more detail in this post. Taxes on income
The Michigan Department of Treasury must receive a Michigan Business Tax (MBT) return from every company operating in Michigan. The income, credits, and deductions of a business are reported on this form. The Corporate Income Tax (CIT), which went into force on January 1, 2012, has taken the place of the MBT. Limited liability companies (LLCs) that are categorized as C Corporations for federal income tax purposes, all C Corporations, and other entities subject to the Michigan Business Tax are all affected by the CIT. Currently, the CIT rate is 6%. Retail Sales Taxes You must charge your consumers sales tax if your small business provides taxable services or sells tangible things in Michigan. Currently, there is a 6% state sales tax, but some counties and localities may impose an additional local tax. It’s crucial to remember that some things, like groceries and prescription medications, are free from sales tax. Actual Property Taxes Property taxes must be paid if your small business owns real estate in Michigan, such as a piece of land or a structure. Your property’s valuation and the local tax rate will determine how much property tax you owe. Your local government will normally assess your property taxes, which are payable yearly. Michigan’s minimum income for tax filing
The minimum income threshold in Michigan for paying taxes for the 2020 tax year is $5,200 for single filers and $10,400 for married couples filing jointly. Even if your income is below these criteria, you could still need to file a tax return if you are self-employed or have other sources of income.
In conclusion, Michigan’s small businesses are charged a range of taxes, such as income taxes, sales taxes, and property taxes. In order to comply with state and local tax rules, it is crucial to comprehend these taxes and how they could affect your company. Consider speaking with a tax expert if you need help with your small business taxes or if you have issues.