Keep Track of Your Sales Receipts and Invoices
It's important to keep track of your sales receipts and invoices so that you can stay organized and on top of your business finances. This will help you keep track of what sales have been made, as well as any returns or refunds that need to be processed. Keep your records in order, and make sure to file them away safely so that you can access them easily when you need to.
Use a Sales Tax Tracking Software or App
There are many software and apps available to help you keep track of your sales tax. Some of these are more complex than others, but they can all be very helpful in keeping your finances organized. Many of these programs will allow you to input your sales information and then keep track of how much tax you owe. This can be a great way to avoid any surprises come tax time.
It's tax filing time, but you're clueless about how to file your income tax.
Here's a quick and easy guide to help you out.
Stay on Top of Your Sales Tax Filing Deadlines
Sales taxes in the United States are imposed by state and local governments, not at the federal level. As a result, there is no single national sales tax rate, but rather a patchwork of state and local rates. This can make it tricky to keep track of all your filing deadlines, but luckily there are a few resources that can help.
The first step is to find out what sales tax rates apply to your business. You can do this by contacting your state's taxation department or searching for your city or county's rates online. Once you know the applicable rates, you can use a sales tax calculator to estimate how much tax you'll owe for each sale.
Next, you need to determine when those taxes are due. Most states require businesses to file sales tax returns on a monthly or quarterly basis, though some have semi-annual or annual filings. Returns are typically due the month following the period being reported (for example, January's return would be due in February). Again, your state taxation department will be able to provide more specific information on filing deadlines.
Once you've filed your return and paid any taxes owed, you should keep records of both for at least three years in case you're audited. Sales tax audits tend to focus on whether businesses have accurately reported their taxable sales and paid the correct amount of tax; they generally don't delve into other areas such as expenses or income. However, it's always better to err on the side of caution and maintain good records just in case.
Hire a Professional Tax Preparer (if needed)
There are a number of reasons why you might want to consider hiring a professional tax preparer. If your financial situation is complex, or if you're self-employed, then it's likely that you'll need someone who knows the ins and outs of the tax code to help ensure that you get the most favorable outcome possible. Even if your taxes are relatively simple, a professional can save you time and hassle by taking care of everything for you.