If you own a business, you likely will be filing sales tax with your state of residence. Now, this doesn’t apply to everyone, as some items are exempt from being taxed.
Accountant Will File Sales Tax
Generally, most businesses deal with an accountant. The accountant will usually take care of things such as filing sales tax for the business. Having an accountant makes the process much easier, and way less time consuming for a business.
Usually, or at least with the company I am working for, the accountant will get all of the receipts and daily register logs, and input the information into their computer program. This will then calculate the amount of sales tax that a business needs to pay to the state. We send information to the accountant at the end of each month, so that everything is kept up-to-date, and we don’t overwhelm her with several months’ worth at a time.
I have a filing system in place to keep everything organized, so that we can ensure that the accountant gets all needed paperwork each month.
How do you collect sales tax?
There are a couple of ways to collect it. You can either add sales tax when someone buys the product, or include it in the price. For some businesses, adding it to the total is easier.
For the company I work for, we include sales tax in our prices, so that there is no additional tax and people can know what to expect as far as pricing. Of course, this means that the company then takes the sales tax amount out of their profits to pay, rather than having the customers pay it.
Most businesses will deposit sales tax that they collect into a dedicated bank account for just that purpose. This helps them keep up with how much is there at all times, without having to take into account monies that are in there for other purposes.
What if I didn’t pay my sales tax?
Unfortunately, everyone runs into a problem at some time or other. This could be in their personal finances or business finances. It happens, and we deal with it. There are options out there to help you if you get behind in making your payments and/or filing your sales tax returns. A VDA is one option. What is a VDA, you ask? It is a voluntary disclosure agreement. This is basically an agreement that allows you to disclose the back taxes owed for your business. It puts a “cap,” or limit, on the number of years you would have to pay back for.
This could be a substantial help to a business, and could significantly cut the amount of monies owed in back taxes. Is VDA right for your business? It can be difficult to know if a VDA is necessary for your business, but it would definitely be beneficial to find out. There are many benefits to using a VDA, and helping you get your business back on track.
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