When was the last time you filed a sales tax return? Chances are, it has been a while. If your business is like most, you may overlook this important task and not realize what consequences could arise from failing to file on time! In this article, we’ll explore the importance of filing a sales tax return for your business and how to go about doing so.
Sales Tax is a Large Expense for Small Businesses
One of the biggest expenses your business will have to deal with is sales tax. While it may not be something you think about daily, this expense should still be taken seriously because failing to file can result in serious penalties for your business if you are found out. If you are wondering how much money exactly goes into federal and state sales taxes each year, the answer may surprise you! In 2016 alone, $682 billion was collected from individual taxpayers across all 50 states! That’s a lot of money going toward maintaining our country and paying off our national debt.
A Sales Tax Return Allows You to Recoup Some of Your Money
For those unaware until now (don’t feel bad—many businesses don’t realize), a sales tax return is a document that allows you to recoup some of the money you’ve paid in sales taxes. This can be done by filing for a refund on any excess amount paid or by taking deductions on your business income. The best part about this process? You don’t have to do it alone! Many accountants and other professionals specialize in helping businesses file their sales tax returns.
Know the Differences between a Federal and State Sales Tax Return
When it comes time to file your return, it’s important to know which form you should be using. Are you dealing with federal or state sales taxes? If both, which one takes precedence? These are questions that can easily be answered by referring to the guidelines set by the IRS. Generally speaking, federal sales taxes take precedence over state sales taxes, but this rule has some exceptions. Please make sure you know what they are before filing your return!
Take Advantage of Deductions That Other Business Owners May Not Be Aware Of
Just because you don’t have a lot of deductions doesn’t mean that you can’t find any at all! There may be deductions that other business owners aren’t even aware of. For example, did you know that you could deduct the cost of meals and entertainment? Or that travel expenses related to your work are also deductible? If you’re not sure whether or not a deduction applies to your business, it’s best to consult with an accountant or other tax specialist.
File on Time or Risk Paying Penalties with the IRS
As we mentioned earlier, one of the biggest consequences of not filing a sales tax return is receiving penalties from the IRS. These can be extremely costly and may even result in your business being shut down. To avoid this, make sure that you know the deadline for filing and plan accordingly! This means setting aside enough time to complete the return properly and avoiding last-minute scrambles.
Keep an Eye Out for Changes in Legislation
The world of taxation is always changing, which means that businesses need to keep up with the latest innovations and new opportunities. If you are aware of any changes in legislation, be sure to take advantage of them so that your business can get ahead! For example, businesses need to adapt accordingly if new deductions have been introduced or sales tax rates change at either the federal or state level.
Ensure that you’re filing on time or risk paying penalties from the IRS. Keep an eye out for changes in legislation so that you can take advantage of any new opportunities. If all this sounds intimidating and you want help enacting these principles, let us know. Our team of experts is ready and waiting to partner with you to create a stellar SEO or marketing plan that drives sales by considering how your customers think.
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