As much as we talk about income taxes at USTaxAid, there are actually two taxes that might end up being more important to your business.
That’s because if you miss these taxes, you’ll get shut down faster than you can even imagine. Those two taxes are:
- Payroll tax
- Sales tax
Payroll tax here refers to the Social Security and Medicare tax that is withheld form employee’s checks and then matched by you. The IRS views these as trust accounts. It’s not your money. It’s your employees’ money and it’s their money. So if you don’t remit it, it’s tantamount to stealing the money. That’s why there isn’t a lot of notice before the IRS shows up at your door, seizing assets and shutting you down quick.
The other tax, sales tax, is tax that you collect from customers and then remit to the state. Again, the state doesn’t view this as your money. It belongs to the state in which the sale happened. They don’t think you should sit on that one second longer than you should.
Sales tax is even trickier, though, because you have to collect tax on sales you make to customers inside states in which they have decided you have nexus. Notice I said ‘they have decided”. Check with your CPA to make sure you (and he or she) are up to date on all the state nexus rules. The states have decided nexus recently on items as simple as spending one day in a state, driving through a state during the course of business, having an employee in a state or doing a seminar there.
You may want to do a search on ‘nexus’ (right hand corner above this blog) to see other articles we’ve written on it at the site.
And if you need some help, drop us a line. WE can explain our services and how you can get in touch with me to talk about your own nexus or other tax issues. Contact Us.