# Tax help



## TeeShirtSamurai (Feb 8, 2006)

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.


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## CoolHandLuke (Oct 27, 2005)

Resellers is so you don't have to pay sales tax to a vendor. You collect that on the retail end... kind of.

I would buy QuickBooks and track everything. Why pay an accountant to do it? Just pay to have them review and file.


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## Rodney (Nov 3, 2004)

CoolHandLuke said:


> I would buy QuickBooks and track everything. Why pay an accountant to do it? Just pay to have them to review and file.


That's what I do and it has been working out pretty well.


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## Decal_Designs (Jul 4, 2005)

My understanding is that the sales tax issue only has to do with your state. Sales tax is not a federal thing.


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## CoolHandLuke (Oct 27, 2005)

DD,

Keep reading.


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## monkeylantern (Oct 16, 2005)

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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## Decal_Designs (Jul 4, 2005)

CoolHandLuke said:


> DD,
> 
> Keep reading.


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.

That's the basic gist of it, am I right?


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## honeyflip (Nov 1, 2005)

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.


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## TeeShirtSamurai (Feb 8, 2006)

Thanks for all the replies!


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## Decal_Designs (Jul 4, 2005)

honeyflip said:


> 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.


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## seibei (Mar 17, 2006)

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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## karlking85 (Sep 26, 2007)

CoolHandLuke said:


> DD,
> 
> Keep reading.


 
Huh???

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??


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## binki (Jul 16, 2006)

TeeShirtSamurai said:


> 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.
> 
> ...


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$tetter Letter® and Tax Guru-Ker$tetter Letter. Terry has a lot of good stuff there.


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## binki (Jul 16, 2006)

monkeylantern said:


> 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.


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## 2STRONG (Oct 17, 2007)

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.


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## TripleT (Apr 29, 2007)

When tax time rolls around both TurboTax and the H&R Block CD (I forget the name of it right now) are very good. Unless a person has some exotic situation, you just punch-in the numbers and the program takes care of the rest.


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## 2STRONG (Oct 17, 2007)

I think it would be better to go with an accual tax person. programs are good but its always good to talk to a live person and discuss what options you have for the next year to help you deductions. it should not be that expensive since there only a coulple extra forms for you buiness.


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## karlking85 (Sep 26, 2007)

Nothing beats tried and true first-hand experience.


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## TripleT (Apr 29, 2007)

2STRONG said:


> I think it would be better to go with an accual tax person. programs are good but its always good to talk to a live person and discuss what options you have for the next year to help you deductions. it should not be that expensive since there only a coulple extra forms for you buiness.


 
That's not a bad way to go - whatever makes a person is comfortable, that's how they should handle their taxes. But it's almost impossible to make a mistake with the packaged programs - so if you like to handle things yourself, they're very good.


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## karlking85 (Sep 26, 2007)

I guess to me, there is no wrong way or right way as long as they are prepared and filed accurately, and promptly. On the other hand, a professional can at times find deductions and other little goodies that may benefit you a great deal, that you may otherwise have been unaware of. I personally like a preparer to be just aggressive enough, but not so much so that he has me expensing the socks I wear to work.  lol


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## 2STRONG (Oct 17, 2007)

hey! those socks are part of your work uniform. DEDUCT IT!!!! LOL


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## karlking85 (Sep 26, 2007)

What about the mints I chew on when I am nervous about the next big project??


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## 2STRONG (Oct 17, 2007)

Ill Try To Figure A Way To Deduct ..:d


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## binki (Jul 16, 2006)

My personal opinion is to have a general knowledge of tax laws but to leave the wet work to the professionals. I use a CPA.


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## karlking85 (Sep 26, 2007)

That's definitely a good way to go. There's nothing wrong with admitting you don't know everything. One of the best moves a business owner can make is in accepting that they on't know it all, and asking for help when needed. An overinflated ego can oftentimes lead to an underinflated checking account.


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