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It’s that time of year again! Time to prepare for tax filing, or get a head start and file now. This time around, we will take a look at tax filing for restaurant owners. Just like any other business, restaurants are required to pay certain taxes on income, property, payroll, and more. Let’s take a look at some of the different types of taxes restaurant owners pay, along with some tips for doing so.

Types of Taxes Restaurant Owners Must Pay

Tips: Cash and tips charged by credit cards that restaurant owners receive from customers are subject to being taxed. Employees should report all tips to their employers, which should then also be reported on a Form 4070 as tip income. This form is usually filed to the IRS on every tenth day of the month once the tips are received.

Payroll: Like any other business, payroll taxes are a percentage of employee income paid to social security and Medicare. Restaurant owners must collect these taxes from all employees, full-time and part-time.

Property: Property taxes are imposed by the city in which the restaurant is located. Restaurant owners and those who lease are responsible for these taxes.

Sales: Sales taxes must be collected by restaurant owners on all food and beverages they sell. Whether the tax is included into the price of the item or added to the subtotal of the bill, sales taxes must collect even if the state in which the restaurant operates doesn’t charge taxes on food.

Liquor License: If restaurants hold a liquor license, owners are responsible for paying taxes on all alcoholic beverages sold.

Franchise: Some states charge franchise taxes. If a restaurant is part of a franchise, they are responsible for this payment. Franchise taxes are based on the net worth of the entity.

How To Prepare For Filing:

Organize All Of Your Files & Receipts: Restaurant owners can make their lives easier by having all of their files already organized. Organize receipts by date and category (ex: travel expenses, food, supplies, etc.), print copies of previous state and federal tax returns, have any necessary tax records and employee records available, and provide all important corporate and ownership documents. The more information you have the better, and the more organized you are, the easier the process will be.

Get statements for your restaurant business loans Let your accountant know about any restaurant business loans you have taken out this year since you can deduct the fee’s and interest from these to help reduce your tax obligation. Call the funding company and ask for an account statement and ship that over to your accountant. This can save you a lot of money if done properly.

Decide How You Are Going To File Your Taxes: Different methods work for different people. Decide whether you’d like to do your taxes on your own via e-filing software, file them manually on your own, or hire a tax preparer or CPA. All methods are sufficient; however, be sure that you are confident in whichever you choose. It is, however, recommended that restaurants with a significant staff or larger company as a whole incorporate the help of a CPA or tax preparer.

Fill Out The Proper Forms: Just like choosing a filing method, filling out the proper forms is extremely important. If you are unsure, consult with a tax preparer or CPA. The types of tax forms you fill out will be determined by how you run your business. For example, if you run an LLC, you would need to fill out Form 1020. If you run a sole proprietorship, you may file a Schedule C. As mentioned earlier, to file taxes on tips received by employees, you would fill out a Form 4070. Do your research ahead of time to avoid any confusion.

Save Your Records: After your taxes have been completed and filed, it is best practice to keep your records for at least 7 years in case audits were to occur. Having all the necessary documents will keep you safe and save you from a huge headache.

Consequences of Not Filing:

Liens on Your Business and Personal Assets: Tax liens are imposed by the law on personal and business assets, such as property, as a result of failing to pay your taxes.

Levy and Garnishments on Accounts: A levy allows the IRS to garnish your wages or take money from your accounts and seize personal property such as vehicles or real estate.

Negative Impact on Credit Scores: Depending on how much you fail to pay in taxes, the IRS can file a lien which can negatively impact your credit score by as much as 100 points.

Prevents Institutions From Extending Credit: Failure to pay your taxes can result in financial institutions being unable to either extend or provide you with lines of credit.

Penalties and Interest: Late filing or failing to pay taxes can cause you to accumulate penalty fees and interest on top of the initial amount owed.

For a full tax filing tip guide check out our Guide below

Small Business Taxes: Last Minute Tips Before Filing Your Business Tax Returns

Don’t let a heavy tax bill affect your business! Excel Capital Management can provide you with the capital you need to pay your taxes and avoid the severe consequences of not filing. All of our funding products are tax deductible!

Financing for Bars and Nightclubs

Owning and operating a small or a medium sized nightclub or bar is cool and trendy. But the fact of the matter is, when it comes to nightclub financing, traditional means can often become overly complicated. The business prospects of a nightclub or bar are considered by many owners as tough.

Moreover, it is obvious that bars and nightclubs are cyclical, which means they are open 2 or maybe 3 days in a week, mostly on weekends. Pumping cash into a cyclical business can be hard when you know that you only operate the business for a few days a week, this can make finding the necessary investment hard.

If you want to find a proper source of bar or nightclub financing, the best thing you can do is look up the packages offered by Excel Capital Management, who offer flexible financing packages for small and independent businesses, like nightclubs or bars.

The Unique Cash Flow Requirement for Nightclubs

Nightclubs, as mentioned above, are open only a few days a week and on special events, for example, a private party or a bachelor party. Nightclubs can also cater to a particular age bracket. Moreover, when you talk about employment in this industry, it is safe to say that people looking to make easy money might find working in a nightclub interesting. But this can also turn out to become problematic when you add in the cash flow factor.

Because of the fact that the employees in this area of the industry tend to constantly switch jobs, looking for one that pays better than the last, it leaves the owner in a predicament. Because of the fact that he has to retrain, rehire and reorganize the entire employee framework, it can cost him valuable time and resources, resources which he needs to run the place successfully to earn more money in two days to cover the expenses for the following week.

Liquidity Options for Nightclubs

Excel Capital Management offers small businesses which have been operating for a minimum of three months, a chance to grow their business by flexibly and strategically granting them working capital and merchant financing loans. They are no restrictions on what you can or cannot do once the loan is debited into your account and you can use it as you please. Here are some of the benefits of acquiring a working capital loan from Excel Capital Management:

Little or No Collateral Required
Minimum Paperwork Required
Does not matter if you have a bad credit score
Repayment Terms are Flexible
No Industry Plan Required
Fast Processing
No Personal Guarantee
No Application Fee, No Upfront Fee
Building Business Credit

Excel Capital Management understands the hard work that you put in when running a small business and the need for proper funding on rainy days, and that is exactly why they have designed flexible and at the same time, convenient funding options. that include bad credit business loans and business lines of credit.

So, visit www.excelcapmanagement.com to learn more about working capital loans.

Tax Filing Guide for Restaurant Owners