Whether you have just started your online business or are running it successfully for the past few years, tax planning is one of the core business aspects that require great expertise. While it is advised to hire an experienced Shopify Sale Tax Advisor for professional counsel, having a detailed understanding of tax planning for Shopify is crucial. There are endless tasks that you need to attend to and ensure that you are well prepared for the tax season, any business operating from US grounds must use this step-by-step guide to Shopify tax planning.
Know the tax deadline and remember it
It is crucial that you know the tax deadlines and be prepared for them. Missing a tax deadline means heavy penalties and no business would like to welcome that. The taxes are due in April and as per the business nature, there are several documents that you would be prepared to submit to the IRS before this date. Make sure you have the date marked in your calendar and by no means have you missed it. Additional deadlines to know:
- Forms 1099 and W2 Postmarked
- Partnership Returns Due
- Corporate Tax Returns Due
- Individual Returns Due
Manage the receipts
The next thing your US Sale Tax Advisor for the online store will advise is managing the receipts of your business. It is suggested to use online tools for receipt management.
Gear up the bookkeeping
Up-to-date books form the basis of effective tax planning and filing. An efficiently managed set of books offer you a clear understanding of the business’s income and expenses. Make sure you partner with the best Shopify business tax advisor for your bookkeeping needs. Incorrect information on the books can lead you to fall victim to unintentional IRS tax claims.
If you have disbursed more than $600 to an independent contractor within the year, you must send the 1099s by February and submitted a copy of the same to IRS before March 31st.
Understand Sales Tax Requirements
Understanding sales tax laws is crucial and they can be very tough. Your Shopify sales tax advisor will help you understand the sales tax laws. You must understand what ‘Nexus’ which signifies the physical connection of the business to a state in order to collect sales tax
To develop a Nexus in a state you have:
- An office
- A warehouse
- Hosting a pop-up shop or selling at a craft fair
- Storing inventory
Know the tax deductions
You can enjoy certain tax deductions for expenses under Schedule C, Form 1040:
- Home office
- Phone and Internet cost
- Web Hosting and Online Store Themes
- Contractor Work
- Shipping Costs
- Vehicle Use
- Online Service Fees
- Professional Services
Let the US Sale Tax Advisor for the online store handle it
When you hire a reputed US Sale Tax Advisor for an online store, you can rest assured that the expert will take care of the tax filling. Make sure you choose a credible source to take care of the Shopify sale tax planning and you can operate well within the tax rules and regulations of the states.