Your Questions About How To Do Business Taxes Online
Jenny asks…
What kind of Business Tax ID or reseller permit do I need for a flea market business?
I will be buying stuff online and some website ask for a Business Tax ID, am ready to get one but I don’t know what kind of ID do I need since am not going to have any employees or a store. My business will be in the flea market
Thanks
Jere answers:
It sounds like you have a sole proprietorship. In this case you use your social security number for your tax ID. You will also need to file estimated taxes. You don’t pay estimated taxes the first year. The second year you know how much to estimate. Be sure to only write down sales that can be traced. Cash sales are your friend. Keep them separate. You will have to decide how stringent you are going to be about the taxes paid on sales. I had a home improvement business and I paid taxes on every penny that I made. Other people I know don’t turn in cash sales. You will have to decide for yourself.
Carol asks…
Should government be able to collect sales tax on online purchases to make it fair for brick-and-mortor stores?
I think it’s already pretty fair because when buying online, the consumer must pay a shipping fee close to what you would pay in taxes. Although the shipping money doesn’t go to the government, it wouldn’t be fair to tax online purchases because because then the online consumer has to pay more than the traditional consumer buying from a store. I think this will destroy online business and ultimately effect the economy.
Jere answers:
Where do you get the idea that on-line purchasers pay more? Most pay less, even when shipping charges are taken into account. Unless you are walking to the store, getting your purchases home definitely is not free. Requiring sales tax collections would come closer to leveling the playing field.
On the other hand, sales taxes are so complex that requiring on-line vendors to collect for every tax district nationwide (there are thousands once local option taxes are taken into consideration) would be a nearly insurmountable burden on retailers. A couple states even have split remitting systems where the vendor sends the state sales tax to the state and the local option tax to the local tax authorities. Imagine having to file hundreds of sales tax returns every month. It’s one thing for retailers that have grown a physical presence in all states and therefore have the infrastructure in place for compliance, but a new on-line start-up could be bankrupted by the compliance costs even before making their first sale.
Even if the law is changed to allow the collection of sales taxes across state lines, until such time as the required infrastructure to support it has been built, no money will start to flow. It would require a massive investment in EDI (Electronic Data Interchange) to automate the process sufficiently that the revenues would be greater than the cost of compliance before it would make sense to even try. Anyone who works in IT will tell you that EDI is the thing that gives us grey hair. There is no EDI standard (despite decades of trying) and without at least one for the calculation, collection, and remittance of sales taxes across state lines, it’s just not going to go anywhere.
George asks…
Can I file my personal taxes separate from my business taxes?
I have (2) W2’s and some other miscellaneous income from checking accounts, etc. and have a 1099-misc for my small business. Can I file my small business at H&R Block and file my personal taxes online? Please let me know if this is possible. THANKS!
Jere answers:
Unless you have a corporation set up, the income from the 1099Misc is reported on Schedule C of your personal 1040. For tax purposes, you and your business are one in the same and all of your income is reported on one return.
Helen asks…
Why is Ohio business tax law so complex and confusing and how might we change it?
So I was looking at starting an online bookstore here in Ohio and as I began to research things I was totally turned off by the craziness of the business tax laws and all the things that business owners have to try and keep up with or lose their businesses. They can’t be working the business because they are too concerned with making sure everyone gets their tax dollars. It’s crazy, and I need ideas on how we can make this better and why it is like this.
Jere answers:
This is why they hire bookkeepers and accountanta.
Laura asks…
How long after i submit my business license do i have to wait to begin operations?
I’m starting an online business (sole Proprietorship) after i submit the application for a business tax license how long do i have to wait to begin operations.
Jere answers:
As soon as you receive your license. Don’t you need a sales tax number also?
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