Depending on the type of business, there are a variety of taxes a business in Montana to be aware of with the common being self-employment.
Montana Sales Tax
Montana has no sales tax, so there is no sales tax for the business to collect.
Montana Self-Employment Taxes
Self-employed business owners are required to pay state and federal income taxes, Social Security, and Medicare based on the profits generated by the business. Profits in a proprietorship are determined before you draw compensation from the business (i.e. your draw or wages are not considered an expense of the business.) Once your liability for federal income tax and self- employment FICA exceeds $500, you will need to deposit the tax payments to the IRS (whether this happens in any one quarter or combination of quarters.)
AccountingAccounting is an essential, but often underestimated part of starting a business. Keeping complete, accurate records is important to the financial health of a business regardless of whether it’s a one-person operation or multinational corporation.
Having a clear picture of sales trends and the business’s financial position gives the business owner data for making decisions about financing, expansion, or other strategic steps.
The decision to handle accounting on your own versus hiring a bookkeeper or accountant is an important one that should be considered carefully. There will certainly be differences in cost and expertise but you should also consider how much additional time you will spend doing your accounting that could be better invested in growing your business.
While a bookkeeper may not be in the budget or even needed in the early stages, there are a number of ways to keep track of your businesses finances.
BasicAccountingHelp.com has a free spreadsheets and educational resources.