This is easily one of the most commonly asked questions we get. Each state has different rules and regulations when it comes to income tax. Most have both, some don’t collect personal income tax, and a few don’t college corporate income tax. And to a new business owner forming a corporation, forming in a state without a corporate income tax might sound awesome! After all, who likes paying taxes?
Unfortunately, things aren’t that cut and dry, and there are good reasons why so many business owners opt to stay in the state that they do business.
You can form a corporation in another state
The holidays are over– and so is 2015. You know what that means…taxes! If you haven’t started getting your 2014 taxes in order yet, you need to take the turn of the New Year as a sign that you should get going. After all, the sooner you start, the more time you have to get everything right.
Think back to the beginning of 2014. Did you wildly overpay? If so, that’s because you didn’t take advantage of all the methods you have at your disposal to lower your tax bill. Here is a handful you should definitely take a look at ASAP. Continue reading
It might seem like you just finished filing last year’s taxes (and if you got an extension, then maybe you actually did!) but next tax season is already on the horizon. And while preparing to file might not be at the top of your priority list, getting a jump start will eliminate a lot of unnecessary stress when it comes time to submit your business tax return.
To help make your life easier, here are four things you can do right now to prepare your business for tax time. Continue reading
When we started our Autopilot sales tax solution, TaxJar, we talked to merchants of all kinds. And one of the things we found out over and over again was that sellers were spending hour after hour on sales tax compliance. Continue reading
When a business owner files for a delayed filing, he or she is putting their business’s paperwork on hold until a later date. This may not seem entirely productive because, often, getting paperwork to go through the state for you business can be a waiting game, anyway. But a delayed filing can be strategic for the success of your business when used correctly.
Here are three reasons a business may opt for a delayed filing: Continue reading
Estimated tax payments are one of the biggest shocks for new business owners. They know that they have to pay taxes, they just don’t realize they have to send in a check four times a year! Most businesses that expect to more than $1,000 – or $500 if the company is incorporated – in taxes have to make estimated payments to the IRS. And, since the next quarterly payment is due on September 15th, we thought it’d be a good idea to do a quick rundown of what estimated tax payments are.
What are estimated tax payments?
Exactly what they sound like. These payments are simply what you’d normally owe on your income. However, since you don’t have an employer to withhold and send in what you owe, you have to do it instead.
Guess what? You owe sales tax to at least one state this month.
Did that get your heart going? Then you’re like business owners all over the country trying to get sales tax under control but struggling to do so. It’s one of the most annoying aspects about doing business these days, particularly for eCommerce businesses.
Why? Because so many states are trying to get as much money as they can, including from online business owners who sell taxable goods to customers in their state. Do you have an employee in one state? You likely have sales tax nexus there. Do you store your inventory in a warehouse in another state? Then you’re likely required to collect sales tax in that state, too.
Some states want your payments monthly. Some want them quarterly. Some even just annually. But if you’re paying sales tax to a bunch of states, how are you supposed to keep up with all these due dates?
It’s that time once again: time to whip out the finance books and try to figure out just how much you owe for quarterly estimated taxes, or QETs. More sitting down at the dining room table, going over numbers, scratching your head trying to figure out what this abbreviation stands for…
Wait, you don’t know what this is about? Quarterly estimated taxes are a big part of the small business owner’s life as they’re constantly buzzing around just around the corner, ready to pounce and make a mess. However, many small business owners still manage to forget about them, leading to headaches and possible fines.
Instead of putting them off, read our quick guide so you can get ahead of the game!
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Be honest: how difficult were your taxes this year? Did you have trouble figuring out how much you made and how bad your expenses were? Were you afraid you missed something? How many fistfuls of hair did you pull out?
Many sole proprietors start their businesses as a hobby or side income. It might not seem worth it to go to the hassle of opening a whole new business bank account. But keeping your personal and business finances combined can lead to some pretty bad headaches. And not just at tax time, either. There are several reasons why you should consider splitting your two financial worlds up immediately. Here are a few that could be affecting your business right now.
Whether you’re a new entrepreneur or an old hand, money occupies a prominent role in your business. Failing to get – and keep – your finances in order can doom your company or consulting practice in the long run. While each entrepreneur has their own set of unique financial challenges, there are several areas where nearly all entrepreneurs can draw from a general well of wisdom.
1. Pay yourself first, Uncle Sam second.
No doubt, you’ve heard the expression “pay yourself first.” That’s good advice for everyone. However, entrepreneurs must remember that with no employer-initiated tax deductions to count on, they must also make provisions to cover self-employment taxes.
2. Hire pros, but know what they’re doing.
You didn’t go into business to spend hours working on spreadsheets. That’s why you hired a Certified Public Accountant. However, you should still understand the basics of keeping the books, if for no other reason than to be able to answer your accountant’s questions at tax time.