Professional accounting services, which tie to payroll, facilitates the filings and amounts due for each of the items listed in this section. We recommend QuickBooks Online due to its functionality and ease of use.
1. Power of Attorney. A Power of Attorney may be required between the franchisee and the franchisor for certain business activities.
2. Sales Tax. The collection of sales tax is required by each state. The necessary paperwork shall be filed and required amounts paid by the required due dates as set forth by the governing state agency. This can be done electronically in most states.
3. FUTA (Federal Unemployment Tax). FUTA must be paid by each employer on a quarterly basis and is usually paid the month following the close of the calendar quarter. This is a “940 Deposit,” which is deposited into the depository account at your bank. The bank in turn pays the Internal Revenue Service. The coupon in the Federal Tax Deposit Coupon Book must be filled out and the appropriate boxes marked. This can be done electronically.
4. SUTA (State Unemployment Tax). SUTA payments are required to be paid periodically by a pre-determined date. The payment envelope must be post marked by the time set forth by the governing state agency. This can be done electronically in most states.
5. FICA (Federal Income Tax Withholding). These are taxes deducted from an employee’s pay check (provided the employee works enough hours to reach the minimum tax bracket for deductions) that are then deposited within a set number of days after payroll is issued into the depository account at an individual store’s bank.
This is part of the “941 Deposit” which includes Social Security and Medicare deposits also. The coupon in the Federal Tax Deposit Coupon Book must be filled out and the appropriate boxes marked. This can be done electronically.
6. Social Security and Medicare. These are two separate deductions taken from every employee’s paycheck. These funds are paid into the depository account along with the FICA amounts.
When paying the Social Security/Medicare amounts, care should be taken because you also need to include the employer contribution portion of these payments. Take the total Social Security/Medicare amount deducted from the employees and double this amount. Only double the Social Security/Medicare amounts (DO NOT DOUBLE THE FEDERAL WITHHOLDING). This can be done electronically.
7. State Withholding. These income taxes must be deducted from an employee’s paycheck (provided they work enough hours to reach the minimum tax bracket for deductions).
State withholding taxes must be paid to the governing state by a given date set by the state. Be sure to use the governing state’s required forms or coupon books. This can be done electronically in most states.
Note: Some states do not withhold state income taxes. Check with the governing state.
8. Property Taxes. Some counties and some cities require you to pay property taxes and these taxes are also required to be paid by a given date. Some counties and some cities can be paid in two (2) installments. Check with your county and city to determine how they handle this.
9. Income Taxes. Franchisees are required to pay taxes on all income earned through the operation of their Street Corner store(s). It may be wise to seek professional advice to assist in the preparation and payment of yearly income taxes.