Coming out of an employment situation, many people think of taxes strictly in terms of that "once-a-year ordeal." They also think in terms of taxes on their net income and tend to forget about all the other areas for which they are responsible. Taxes accrue for a variety of reasons, and unless you're made aware of them, you could find yourself on the wrong end of some stiff interest and penalty payments.

It's tempting to think all of the cash in your bank account is yours, but if you're in business, that's just not so. Part and parcel with operating a business is the collection of sales taxes and payroll taxes for all levels of government. It's a responsibility not to be taken lightly.

Some taxes apply to all types of businesses, and others are unique to specific types of businesses. It's confusing, but an organized approach to learning about the issue will save you time, money and headaches.

When you start in business, you're usually required to get a business license through your local government. This also requires that you register for taxes that will be assessed, not on how much money you make, but rather on seemingly irrelevant criteria such as the number of your employees, the level of your company's sales and the value of its fixed assets.

This first level of taxes relates somewhat to how your jurisdiction wants to raise money, but with few exceptions, it doesn't relate to your net income. In total, for most new small businesses, these taxes will probably not exceed $1,000.

One exception to this rule is a liquor license requirement, which can run $2,000 or more in many states. This isn't much money if you budget for it, but it's a lot when it comes as a surprise.

Once you register your business, make sure you're informed of all your obligations so you can plan accordingly.

The next level of taxes will come from the sale of goods. Your state, county and possibly even your city will want you to collect taxes on every sale you make. For retailers selling goods, this is almost universally true. For those in the service industry, you need to check local laws.

Many services aren't subject to sales taxes. Many businesses have part of their sales subject to sales tax and the rest not. An example would be a service station. The parts they sell may be subject to sales tax, but the labor to install the parts is not.

DIFFERING RATES

Matters are further complicated when the local jurisdiction decides to tax different items at different rates. Gasoline might be at a different rate than oil for a gas station. Food in a restaurant might be at one rate and any alcoholic beverages sold at another. In some cases, the rate stays the same, but the taxes are paid to different departments.

Sales tax collection usually requires that you show the total of sales subject to each tax rate and then show the total of all sales. As mentioned earlier, some types of sales aren't subject to these taxes but still must be reported.

If the company sells any goods to another business for resale, then these sales are also exempt. Be careful that you document that these types of customers have a special exempt status or you could be held liable not only for the interest and penalties, but the tax itself.

Your taxing authority will provide you with forms to do all reporting. Some businesses have the luxury of all sales being in one jurisdiction. Occasionally, due to the nature of the business, such as off-site sales and service, the business will be required to report to a number of other jurisdictions.

This is never pleasant, because the business owner is then required to add a new dimension to his sales records. Once all of the information has been collected, the individual should complete the forms and remit them along with the payment, usually in the following month.

Like it or not, every business is required to collect money for the government.

When starting your business, become very aware of all of the reporting requirements to which you'll be subject. Understanding these rules will save you and your customers a lot of money.

Another area of real complexity is the area of employee reporting. Here you're paying a gross wage to the employee and then subtracting certain amounts, which then must be turned over to the government. For payroll it's mostly the federal and state levels, although some jurisdictions also have local level reporting.

An example of this remittance is the income tax deducted from your employees' gross pay. This must be collected and then remitted within the specified time period. The time period varies, since it depends on how much money you're collecting.

In addition to the remittance, you're also required to reconcile these payments on a quarterly and annual basis. Finally, be prepared to provide tax-reporting information to your employees at the end of the year. For those close to state boundaries, you have the extra dimension of second state reporting based upon employee residency.

In addition to these remittances, you're also required to pay additional taxes relating to Social Security and unemployment. Some states add the burden of providing hours and weeks worked so their unemployment funds can be properly allocated.

In some cases businesses have been able to use third par-ties to assist in everything but the remitting of funds. Your business is required to have these funds in on time.

It's tempting to either hold back or reduce the amount of the remittance with the idea you will catch up next month. This is both illegal and extremely dangerous. These funds (sales tax and pay-roll taxes) are considered to be held in trust by you. Not remitting them can bring down the full weight of the government tax bureaucracy on your business.

GRAVE CONSEQUENCES

Failure to pay these taxes results in immediate substantial penalties, short payment terms and the possibility your business will be closed down. Even business bankruptcy won't protect the individual from the government in its collection of these monies. The best advice is to keep up to date with all of these payments and look elsewhere for extra money.

In all cases, those who are new to business and the employment of other people should consult people familiar with the process. The government holds classes on the proper calculation and remittance of tax payments. Many people and businesses prefer to transfer at least the reporting and record keeping to their accountants.

As a business owner, you're given these responsibilities whether you want them or not. Your best protection against running afoul of the rules and the various jurisdictions is to look before you leap. Contact the various levels of governments in your area and request information on your responsibilities as a business owner. Follow this with a careful reading and, at the very least, a consultation with an expert.

Although it's tempting to hold back tax payments, the penalties can be stiff.

Of course, collecting taxes is not the only responsibility you will be shouldering as a business owner-it is just one of the most important. You may also be required to comply with a number of other government rules and regulations at the federal, state and local levels. These can range from employee safety issues to zoning codes and even "blue laws" that set limitations on the times you are allowed to operate your business.

Then there are the responsibilities that have nothing at all to do with government regulations or taxes. These include your responsibility to yourself to turn your venture into a profitable operation and to make it a safe and satisfying place for your employees to work and your customers to shop or do business. While it's true that all these responsibilities add up to a considerable load, most entrepreneurs find that the satisfaction of owning their own business makes it all worthwhile.