Self-Employed and Business State Taxes
There are a number of forms required when you are self-employed or own your own business.
- Income Taxes
- Alabama is pushing to have all payments come to them through My Alabama Tax (MAT). Individual, business, sales tax, all of it.
- Estimated and Self-Employment Taxes
- Alabama also requires estimated taxes to be filed with the 40ES.
- Sales Taxes
- If you sell goods rather than offer services, you will have to pay sales tax to your state. Alabama has a list of which goods are exempt from sales tax in Alabama, and also the sales tax rates and due dates.
- If you have employees...
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- If you are hiring contract laborers, you will need to file a Form 1099-MISC on every contract laborer paid and transmitted with Form 1096 Annual Summary and Transmittal of U.S. Information Returns.
- If you are hiring employees, you will need to file a Form W2 on every employee you paid and transmitted with Form W3 Transmittal of Wage and Tax Statements.
- Withholding Taxes
- State: Generally, all employees must have State taxes withheld from their paychecks.
- Local: Some cities, towns, and localities must have taxes withheld as well.
- Withholding taxes are reported with the Form A-1 and paid by check, or reported and paid through My Alabama Taxes.
- Unemployment Taxes
- The State Unemployment Tax Act (SUTA) is not withheld from employee wages and are paid by the employer. Unemployment is reported at the Alabama Department of Labor.