South Carolina business owners must take several steps to get their businesses off the ground. They must choose a location for their business and they must obtain financing. They must choose a business entity, such as a limited liability company or a partnership, and they must register a business name. And, of course, the business must register for state and local taxes.
Withholding tax is taken out of wages. The withholding tax goes toward the total annual income tax liability. Employers that hire South Carolina employees must issue a return to the South Carolina Department of Revenue for the taxes that have been withheld.
First, the business owner should complete Form SCDOR-111, which is the Business Tax Application. After this form is completed, the business owner will be able to move forward with a number of steps, such as registering for a retail license. After completing the Business Tax Application, the business owner will also be able to register for income tax withholding. Once the application is completed, the business will receive a withholding file number. The business owner will reference the withholding file number in all correspondence and when making payments. It must also be referenced when the business owner calls the Department of Revenue.
The method of payment varies depending on the amount of withholding tax the business is filing. For those whose withholding tax is more than $15,000 during a quarter, or that make more than 24 payments each year, the business must pay online. These businesses must also submit the Withholding Tax Coupon, Form WH-1601. For businesses that must pay less than $15,000 per quarter, payment may be submitted voluntarily online.
W2 forms for employees are due by January 31 following the tax year. So for tax year 2017, W2s are due by January 31, 2018. These may be submitted online.
As for filing the returns, businesses must file a withholding quarterly tax return (form WH-1605) for the first three quarters of the year. At the end of the fourth quarter, a withholding fourth quarter and annual reconciliation return, WH-1606, must be filed.
These returns are due on April 30, July 31, October 31, and January 31. It is very important to meet these filing deadlines. If a business misses one of the withholding tax deadlines, the business may be subjected to penalties.
As of January 1, 2017, the South Carolina Withholding Tax Tables have been updated for the first time in 25 years. The withholding tax tables will also be updated every year beginning with 2017. It is very important that business owners use the new tables to ensure they are submitting the proper amounts. These tables, along with the withholding tax formula, are available at the South Carolina Department of Revenue website, www.dor.sc.gov.
How business attorneys can help with registration and filing
Navigating the websites of South Carolina’s governmental agents is not always easy. There are dozens of forms online, and it is not always clear which ones you need to use. With the assistance of a business attorney, you will ensure that you are taking the proper steps to launch your business and meet state tax requirements. Rather than risk being subjected to penalties, it is better to seek the guidance of an experienced attorney who understands applicable laws and regulations.
Let our business attorneys advise you
At the De Bruin Law Firm, our attorneys are experienced in helping businesses register for state and local taxes and filing those taxes. To schedule a free consultation with our attorneys, call 864-982-5930 or visit debruinlawfirm.com.