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After 6 months of hard work it all has finally paid off and I now own and operate a successful store, but I have no clue how to file for taxes. Can someone help me out and point me in the right direction on exactly what forms I need to fill out for taxation purposes. Is it only sales and use tax? Do I only need to file for the state that I'm in?

How does it all work?

Thank You in advance for any replies.
#file #taxes
  • Profile picture of the author alksense
    Originally Posted by Meta Morph View Post

    After 6 months of hard work it all has finally paid off and I now own and operate a successful store, but I have no clue how to file for taxes. Can someone help me out and point me in the right direction on exactly what forms I need to fill out for taxation purposes. Is it only sales and use tax? Do I only need to file for the state that I'm in?

    How does it all work?

    Thank You in advance for any replies.
    Find a small business accountant in your local area, set up a meeting, ask what to bring and have them handle everything for you.

    That's what I did when I started making money and it was the best decision I ever made. Taxes aren't something you want to mess around with and IMO the small fee to have a professional is one of the best investments you can make.

    Good Luck!
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    • Profile picture of the author Meta Morph
      Originally Posted by alksense View Post

      Find a small business accountant in your local area, set up a meeting, ask what to bring and have them handle everything for you.

      That's what I did when I started making money and it was the best decision I ever made. Taxes aren't something you want to mess around with and IMO the small fee to have a professional is one of the best investments you can make.

      Good Luck!
      yes probably a very smart idea as I am basically clueless on the accounting side of things. Thanks AlkSense you always have something valuable to share and incorporating a few things from your training has definitely contributed to my success.

      Cheers,
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  • Yes, it is true you NEED to get an accountant.

    But this is basically what it is (generally)

    Quarterly, you need to remit sales tax to those people that have purchased in your state.

    Annually, you need to file for taxes on what you've made.

    Now - in order to make sure you HAVE enough for taxes, in the beginning I always followed this rule of thumb:

    Off the profit that month, only pay yourself 40% of the profit. 10% Goes into a 'slush fund' - for an emergency fund, or what not - and 50% will go to the tax bill. If you owe that much, great. If not, then the rest can go to re-investing in the business or the slush fund later.

    However - NOW my rule-of thumb is: I just pay myself once a year after taxes and expenses. All my accounts accrue, and I'm very miserly about spending money. People are very 'YOU NEED TO SPEND MONEY TO DECREASE YOUR TAX BILL.' But that is for people that don't know math.

    I mean, why would I want to spend 5000 dollars to save 1000 dollars in taxes? Keep as much money as you can. Yes, you can put it in places to AVOID taxes, but you don't spend it on dinners, vehicles, and other things JUST to save on taxes.

    That is why I only pay myself once a year - and it's after my tax bill is paid - and my accountant is paid.

    And having a debt-free company makes the monthly maintenance WAY easy when it comes to bills. Invoicing is different - but it isn't a debt.

    But the advice to get an accountant is still solid.
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  • Profile picture of the author Daniel J
    I agree. An accountant is essential. My wife does the books for the business, but taxes can be really complicated. When I was doing this as a "second income" we went to a cheap tax prep place which was fine (Liberty Tax Service), but as soon as I started making 6 figures, Liberty Tax said "um... I think you should get a CPA" which was one of the best decisions I made. My CPA knows what he's doing (and he sells on Ebay on the side too so he knows all the ins and outs). He also saves me quite a bit on taxes. Yes, I pay him much more than I paid Liberty Tax, but the savings, in the end are worth it! Good luck!
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  • Profile picture of the author Night Train
    Get an accountant! They can give you the ins and outs of paying the least amount of tax. As AuctionDebt stated above you don't want to spend 5K to save 1K but an accountant may be able to show you how to spend 5K to save 5K in taxes or other such tax breaks that H&R, Liberty and such would never point out to you.
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