Restaurant taxes?

Question

Hi, I'm a new restaurant / bar owner. I was blown away by the outrageous taxes the government charges restaurant owners. Withholding taxes along with sales and use taxes in North Carolina are killing me. At this rate I can not afford to stay in business. Is there any advice anyone can give me to get some sort of relief. If I earn $40,000 gross per month and my food and alcohol expenses are $20,000.. I'm being taxed on $60,000 at 4.5% and 2.5%. I pay taxes on the alcohol at time of purchase. Why am I being double taxed in the sales and use tax. How do I profit between overhead and taxes?

Answer 1

You should be charging the customers the sales tax on the food and alcohol that you are selling to them. So you are not losing any money that way. If you have employees you are required to pay social security taxes (6.2%) and medicare taxes (1.45%), Federal unemployment taxes, and state unemployment taxes. If you are losing money, see if you can raise your prices. Other restaurants in your area have to pay the same costs that you are paying, sales and use taxes, payroll taxes, etc.

Answer 2

YOU aren't paying sales taxes, your customers are. You are only a "pipeline" for those taxes -- you collect them from your customers and pay it over to the state -- they are never your funds to begin with. Keep them separate from your operating funds if you have to and don't make the common mistake of using them in your financial projections.

You may wish to bring in a consultant to help with cost containment issues. There are hundreds of ways you can waste money in a bar/restaurant so there are plenty of ways to maximize profit as well. I'd also get some help from a CPA on getting a handle on the books and working up your budget.

Answer 3

Your business enterprise provides your stated techniques (or the allotted techniques if concern to allocation regulations and you haven't any longer stated them) to your hourly salary in the previous calculating the tax. Tip earnings is totally taxable. Then they subtract them lower back out in the previous slicing your examine considering which you have already gained the money. some years in the past I worked at a place that required us to coach in our techniques on the top of each shift. They have been nevertheless to us after taxes have been deducted via the business enterprise. conserving out replaced into grounds for instantaneous termination.