This section of the forum is for discussing the business and finance issues of the t-shirt industry. Which business structure to use (sole proprietor, LLC, S Corp, etc), how to handle billing, where to register your business and get the proper licensing, etc.
My site will be going live soon and I'm just trying to get my ducks in order.
When tax time comes I want to make sure I'm filing correctly. My business is a sole proprietorship and I have a CA reseller's ID.
I'm assuming since this is a sole proprietorship that filing taxes for the business will be pretty easy. The thing that is confusing me is the whole reseller's license; does this have anything to do with my federal filing or just the state of CA?
I'm assuming as long as I keep good records an accountant can help me out with this as well if need be but it would be nice to be able to take care of this myself.
Whatever happened to that bill about online sellers having to collect and pay sales taxes to different states? Some insane system that would take the average seller days and days to work out? Did it die on the floor?
Being far away, in a place of sensible taxes, I lose track
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Well, my tax preparer, H&R Block, told me that paying sales tax that is collected from the sale of your merchandise goes to the state. The IRS does not collect any of the sales tax. Of course the IRS does collect income tax.
With a resellers license number, you do not pay sales tax on the merchandise you purchase for resale. Also, if you are selling that merchandise to someone who will also be selling that merchandise, like a store, then they do not pay you any sales tax either, as long as they provide you with their resellers license number.
The bill concerning online sellers having to collect and pay sales taxes for different states choked and died, thankfully. I asked my accountant about the aftermath and he said that, technically, the way it currently stands is that your buyers are required to pay their own sales taxes in their home states - ie., if someone buys from Amazon or you, they have to report and pay the tax on their state form in April. However, he said there's virtually no way for the states to follow this up (other than visiting your house and torturing the info out of you) and pretty much no one pays it.
The bill concerning online sellers having to collect and pay sales taxes for different states choked and died, thankfully. I asked my accountant about the aftermath and he said that, technically, the way it currently stands is that your buyers are required to pay their own sales taxes in their home states - ie., if someone buys from Amazon or you, they have to report and pay the tax on their state form in April. However, he said there's virtually no way for the states to follow this up (other than visiting your house and torturing the info out of you) and pretty much no one pays it.
Also, if you have a website that you sell from, and a person buys something from the site that lives in the same state that you do, you are supposed to collect sales tax. If they do not live in your state, then you do not.
as a sole proprietorship, all of my business tax stuff is just attachments to my personal tax forms, right? I think I've done everything (schedule C, 1040, etc), but I ended up doing it without an accountant and am paranoid.
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I believe Bill got it right, actually. You register with your state to file and collect sales tax. It is not a federal thing, in fact, many states don't even collect sales tax, and the sales tax ultimately funds state functions and expenses. Right??
My site will be going live soon and I'm just trying to get my ducks in order.
When tax time comes I want to make sure I'm filing correctly. My business is a sole proprietorship and I have a CA reseller's ID.
I'm assuming since this is a sole proprietorship that filing taxes for the business will be pretty easy. The thing that is confusing me is the whole reseller's license; does this have anything to do with my federal filing or just the state of CA?
I'm assuming as long as I keep good records an accountant can help me out with this as well if need be but it would be nice to be able to take care of this myself.
Thanks.
The BOE will send you a form at the end of the year. Just fill it out and send it in. That will take care of State Sales Tax Collected.
For Income Tax, as a Sole Prop. your business income will flow through to your personal statement. Personally, I don't do anything without a CPA but that is me. Check out Ker$tetter LetterŪ and Tax Guru-Ker$tetter Letter. Terry has a lot of good stuff there.
Whatever happened to that bill about online sellers having to collect and pay sales taxes to different states? Some insane system that would take the average seller days and days to work out? Did it die on the floor?
Being far away, in a place of sensible taxes, I lose track
This can never happen. If I don't have a physical presence in a State, they have no jurisdiction over me. The federal government cannot compel me to collect sales taxes for States I am not in. The other State governments cannot compel me to collect their sales taxes either. They have no jurisdiction. Case closed.
your taxes will not be to hard dont worry to much as long as you keep your records in good shape all you have to do when you do your taxes is take your books to them and let them deal with the stress.if your working from home you can write off your office space and partial utlities, equipment. i had this same problem so i accualy toke tax classes and got certified to do taxes from h&r block best $250 ever spent i accually did some taxes last year, there still some much to learn though. so many loop hole yet to be found you will be fine.
Tax help 
