8 common sales tax problems you should try to avoid at all costs
TRANSCRIPT
The Most Common Sales Tax Problems & How to Avoid Them
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Presentation
• This presentation is designed to help you avoid some of the most common sales tax problems
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1) Adherence to the rules and requirements
• As your revenue increases, so do your tax responsibilities.
• It’s important for business owners to pay their state sales tax.
• Adherence to the rules and requirements ensures that everything runs smoothly.
• Slip up and you may find yourself in trouble.
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2) 8 Common Sales Tax Problems
• Here are 8 common sales tax problems you should try to avoid at all costs
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3) Failing to Collect Sales Tax
• For some reason, businesses sometimes overlook the need to collect sales tax.
• There is no excuse for this.
• If you sell a tangible product, you need to collect sales tax.
• Failure to do so means you will lose money.
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4) Inadvertent Misuse of Sales Tax Money
• There is absolutely no excuse for misusing sales tax money.
• But this still happens on a regular basis.
• Small businesses don’t always manage bank accounts properly.
• Funds often become co-mingled.
• This means business revenue, personal money, and taxes are all sloshing around in one big bucket.
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• When this is the case
• Tax money will be spent on payment of bills – personal or business.
• Your state’s authority does not look fondly on this and will enact harsh penalties.
• To avoid this situation...
• It’s best to keep separate accounts for different types of funds.
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5) Intentional Misuse of Sales Tax Money
• The worst offense is intentionally misusing sales tax money.
• This happens when a business owner finds himself in trouble and “borrows” the sales tax money to pay off some other expense.
• In most cases, the owner never recovers the money and cash flow problems only become worse.
• No excuse is acceptable to your state’s tax authority in this situation.
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6) Doing Nothing
• Your state’s does not look favourably on inadvertent misuse of sales tax money.
• It’s always best to pay part of what is owed, rather than avoiding
the sum altogether.
• Business owners should pay what they can afford and come to an agreement for the remaining balance.
• Often, your state’s tax authority will work with the business owner to setup a repayment plan.
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7) Miscalculations
• Business owners should have a basic understanding of finance and accounting
• Errors can easily occur when dealing with sales tax.
• One solution is to run numbers twice using two different tools or methods.
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8) Failing to File on Time
• Business owner forgets to file the tax form on time
• Late tax forms can be costly.
• Business owners should keep a calendar to remind them of all deadlines.
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9) Non-profit Exemptions
• One common misconception is that all non-profits are exempt from paying sales tax.
• While this may be true, it is not always true.
• Non-profit status does exempt the non-profit from federal income taxes.
• But some states still require sales tax.
• Business owners should check state laws and regulations to ensure
they are following the rules.
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10) Online Businesses
• Online businesses are subject to different rules and regulations.
• This can leave owners confused and misguided.
• One common mistake is believing sales tax is not required for an online business.
• In the state where the business has a physical presence, it is required that the business charge and pay sales tax.
• It’s best to check specific rules and regulations regarding this law.
• Rules and regulations do change from time to time.
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Example: Sales Tax Word Problems
• If you are looking for answers on how to solve sales tax problems.
• Sometimes it is wise to simply practice by looking at example situations.
• Here are some sales tax word problems to get acquainted with the methods.
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Your local dealership is selling a pickup truck for $18,995. The sales tax is 7%. What is the total price and what portion of that is sales tax?
• The total price is $20,324.65. The sales tax is $1,329.65.
John purchased two pairs of blue jeans for $29 dollars each and one shirt for $12. The sales tax is 6.5%. How much did John owe and what portion is the business required to set aside for sales tax?
• The total price paid was $74.55. The Sales tax was $4.55.
• Maintain the integrity and reputation of your business with your state’s tax authority by using these 8 tips on how to avoid or solve sales tax problems.
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Contact Long Island Tax Resolution Services
• We can help with resolving current sales tax problems issues so that your company can move forward freely.
• Visit@ http://goo.gl/BvIcP7
• Call us at: 631-244-1650
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