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In this economy, small business owners face a double-edged sword. On the one hand, operating a business can be a powerful wealth-building tool. On the other, too many mistakes, like not properly paying business taxes, and you’re in serious trouble.

Small business, considered the backbone of the American economy, accounts for 52 percent of all U.S. workers. Some 99 percent of all companies employ fewer than 500 people. Small businesses come in all shapes and sizes, from caterers, restaurants, and landscape companies to banks, tax preparation services and trucking companies. But the one thing they have in common is the necessity to make a profit to stay in business.

With that in mind, one of the key points for business owners to remember is to adhere to all business taxes levied specifically at them. Forgetting to pay even one can attract unwanted attention from Uncle Sam. So for guidance, business owners can turn to the Small Business Administration. The SBA was created in 1953 as an independent agency of the federal government to assist small business owners and protect their interests. The SBA helps entrepreneurs develop and grow their business, as well as those thinking of starting a business.

Eager to open your doors for business? Not so fast!

After drafting the all-important business plan and securing start-up funding, but before any employees can be hired, the law requires U.S. businesses to get a Federal Employer Identification Number. Those who already have employees are responsible for federal income tax withholding, Social Security tax, Medicare tax and Federal unemployment tax. Any income taxes withheld, as well as both the employer and employee Social Security tax collected, must be deposited in the financial institution of the company’s choice. There is plenty of paperwork involved, so many businesses outsource the payroll and tax-related responsibilities to third-party payroll service providers.

But business owners with no employees are still not off the hook, because they also have tax requirements to follow. The Self-Employment Tax is a Social Security tax and Medicare tax mainly for individuals who work for themselves. It is similar to the Social Security tax and Medicare tax withheld from the paychecks of most wage earners.

Once the business taxes hurdle is cleared, there are other issues to address when executing business development plans--specifically, how to structure ownership. The choices are sole proprietorship, a partnership, a limited partnership, a limited liability company, a for-profit corporation, a nonprofit or a cooperative.

Often, sole proprietorships and partnerships are best suited for new businesses, and no special paperwork is needed. Unlike a limited liability company (LLC), a sole proprietorship is a one-person business that is not registered with the state. Legally, a sole proprietorship is inseparable from the owner.

Limited partnerships are expensive and can be complicated to set up and operate, and are not recommended for the average small business owner. Anyone interested in this type of business should consult an expert. Forming an LLC or a corporation is also costly. The main benefit is that these types of structures limit the owners’ personal liability of business debts and court judgments against the business. The corporation is an independent legal and tax entity, separate from the owners and managers. This makes sense for owners who are at risk of being sued, or who have substantial personal assets they want to protect from creditors.

A nonprofit is formed to carry out a charitable, educational, religious, literary or scientific purpose. It raises funds by soliciting public and private grant money as well as donations from individuals and companies. Generally, federal and state governments do not tax nonprofits. A cooperative is democratically owned and operated by its members. Examples can include farms, dairies, food stores or bookstores.

There’s a lot to remember about owning a small business and paying business taxes, and careful planning is the key to success. Small businesses just starting out have a high failure rate in their first few years, so do your homework beforehand. Good luck!