• Monica Fields

Process servers paying taxes.. No!

How Process Servers Pay Taxes

Process servers tend to forget that taxes are due quarterly and they’ll need to meet federal and state obligations. Also where your business is and your business structure can play a part in how you pay taxes.

How Often Do You Pay Taxes

Being a business owner you are required to keep clear concise records and pay taxes.

Paying your taxes on a predetermined schedule would be best. Aligning with your tax year with the calendar year can create benchmarks. Once you set your tax year, the only way to change it is to call and get permission from the IRS.

For complete details on pre-scheduled tax year vs. calendar tax year go to IRS online.

Paying taxes to your state

Not all service businesses have to state or local taxes. Tax laws in every state have completely different rules. The structure and location of your business can affect your tax obligations.

State obligations that a process serving company can include employment taxes or income taxes.

LLC or Corporation = Taxed Separately from Owner

Sole proprietors = Taxes reported using same form as personal taxes

Things will be a bit tricky when you decide to bring on employees. Paying employment taxes can be confusing. You would have to worry about workers’ compensation insurance, temporary disability insurance, or unemployment insurance. Beside 1099 independent contractors you will have to withhold employee income tax. Tax rates vary from state to state, so seek advice from an account.

Federal taxes process serving companies pay

How your business is structured may save you money and cost on accounting fees. Here is a list of federal tax obligations for a process serving company.

  1. Income tax

  2. Self-employment tax

  3. Estimated tax

  4. Employer tax

  5. Excise tax

All taxes have different forms that you file with the IRS. Check with the IRS to see what obligations you have for your company.

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