Resourceful Guidelines to Pay Texas Franchise Tax Online Conveniently

In Texas, franchise tax is known as a "privilege" tax that is compulsory to be paid by companies chartered in Texas or running business in Texas.

Texas Franchise tax online is considered to be a medium to generate proceeds on the basis of a company's net worth, instead of on the annual taxable income. If you run a business in Texas then, you require understanding the right approach to calculate and pay your franchise tax online.

How to Decide Whether the Texas Franchise Tax Applies On You?

1. Choose Whether the Franchise Tax Applies on You or Not:Any legal entity which incorporates a business in Texas or is chartered in Texas is bound to pay the franchise tax. This comprises-

• Corporations
• Partnerships (general, limited and limited liability)
• Joint ventures
• Trusts
•  Limited Liability Companies (LLCs)
• Banks and savings and loan associations
• Professional and business associations
• Other entities running business in Texas.

2.Choose If your Business is Not Liable: You might not require paying a franchise tax in Texas if your business belongs to one of the below mentioned categories:

• Sole proprietors (excluding single-owner LLCs)
• Partnerships
• Few trusts or entities which are not liable under the state or federal tax law.

 3.Take Professional Advice: If you are unsure whether your company is liable to pay Texas franchise tax online then, prefer consulting a reputed corporate attorney or a certified public accountant that is acquainted with the Texas tax laws.

4.Speak to the Texas Comptroller of Public Accounts: The Texas comptroller’s office of public accounts assesses and collects the franchise tax in Texas. If you require additional assistance to choose whether the franchise tax applies to you or not then, you can speak to the Taxpayer Services Line, fully committed to handle the franchise taxes payment issues from Monday to Friday between 8 a.m. and 5 p.m. 

How to Evaluate Your Total Franchise Tax Amount?

1.Assess Your Company’s Margin: Start with your company’s total proceeds and then subtract either of the below mentioned three categories. Make sure that you evaluate the value for each of them individually and then make use of the value which results into the smallest final amount.

• Subtract the price of products (raw materials and production labor) sold and to apply this, your company have to actually sell a product, not merely services.
• Subtract the reimbursements that your company pays to their employees. Few benefits can be incorporated, but there must be a cap of $300,000 for each employee.
• Deduct 30% of the total proceeds and this technique usually applies to companies having low salaries and low product prices.

 2.Evaluate the Tax: Making use of the lowest figure which results from the above discussed three subtractions, a company which is primarily affianced in wholesale or retail trade would pay a tax of 0.375% while the others will pay 0.75%.

3.Try Using the Comptroller’s Online Tax Calculator: For getting an accurate tax calculation, you may make use of the online tax calculator issued by the Texas Comptroller of Public Accounts through visiting: http://comptroller.texas.gov/taxinfo/taxforms/HB3Calc.pdf.

 

Right Approach to File the Texas Franchise Tax Forms Accurately:

1. File the Franchise Tax Report Online: The Texas franchise tax report is the report you send to the state of your company’s total revenue annually and assessment of the tax that you are paying. The annual franchise tax reports in Texas are due every year on May 15. There are basically three different forms to choose from-

• You can report that you are obliged to pay no Texas franchise tax online if your total annual proceeds are $1,110,000 or less for all reports filed past 1 Jan 2016.
• You can make use of the E-Z computation tax form if your business has total annual proceeds between $1,110,000 and $20 million for reports filed past 1 Jan 2016.
• You can make use of this form, if either of the other two forms applies.

2.File The Public Information Report: This form is needed annually for everyone filing a franchise tax report, even if no franchise tax is due. The business perils to lose its working status in Texas, if this form is not being filed.

3. File Extra Forms: Besides either of the standard tax reporting forms and the Public Information Report, you might require to file one or more of the below mentioned documents-

• Affiliate schedule form is needed if you are filing as a joint group.
• Tiered partnership report form is needed when you are filing as a tiered partnership.
• Common owner information report form is needed for few united group filings.
• Payment form can be used by those who are paying a tax but not filing by electronic means such as email.

How to Prepare Your Franchise Tax Report & Pay the Franchise Tax in Texas?

1.  Make Use of Printed Materials: The Texas Comptroller of Public Accounts issues an annual brochure of franchise tax information and instructions which can walk you through the entire line-by-line closure of your tax reports.

2.Choose The Reporting Technique: Texas primarily accepts three different techniques for reporting and payment-

• The Comptroller’s office has permitted electronic submission software list of providers which you might get in touch with to help you with completing your reports and submitting the final outcomes. Every provider would charge its own fee for the services rendered.
• WebFile is an electronic service which is being chosen to use alone without any assistance for evaluating your taxes and create and submit the final reports. Few business entities are requisite to use this service, while the others are pushed to use it as it is faster, cheaper and saves paper. Visit this link- http://comptroller.texas.gov/webfile/required.html, to choose if your business requires using the electronic filing.
• Download and print the forms and mail them in along with your payment. Choose the right tax year and print and fill in the forms completely.
• Submit your full report and if you are paying Texas franchise tax online then, you require following the instructions towards the end of the form to electronically sign it and submit your final report. If creating full report through paper then, you should sign the forms and return them through mail, together with the right payment, to the Texas Comptroller of Public Accounts.

Now that you have a clear idea of how to pay Texas franchise tax online then make sure to employ and deliver all the essential documents to avoid further legal hassles.