how to file shopify taxes

taxes they are not fun but they are a,very important part of e-commerce,because you need to be collecting sales,tax for different orders,and you'll also have taxes that you need,to pay to your own government,so in this video we are going to go over,the different taxes,for small businesses and how to make,sure that you are,staying within the law for all of that,and paying on time,okay so since we are talking about taxes,let's start out with a huge disclaimer,for this video,that i am not a tax accountant i am not,a cpa,i have no certification for talking,about taxes,i am just talking as an e-commerce,entrepreneur,and a small business owner myself and,i've been paying taxes for over 11 years,for my small business,so i'm talking from my perspective here,so make sure that you still,contact a tax accountant in your area,and you,verify everything with them to make sure,that everything is,set up correctly and that you are paying,your taxes correctly,okay so now that that's out of the way i,want to talk about the different types,of,taxes that you have to pay whenever,you're doing an e-commerce store,so first off you do have sales tax that,you need to collect,and this is going to be depending on,where your location is and what country,so i'm going to have this video talking,specifically about,the us so it's going to be different,depending on the country that you're in,or that you're selling in however in the,u.s you need to be collecting,sales tax anytime you have a physical,location,in a state so that could be that your,office is in,one state and your fulfillment center is,in another state,you would need to be collecting sales,tax in both of those states because you,then technically have a physical,presence in both states,you also have to do sales tax,collections based off of an,economic nexus so there are different,requirements for different states based,on if you have so many transactions,in a state or if you have a certain,dollar amount that you have sold online,in the state,so this can get a little bit confusing,so we'll go over the best way to do that,in just a minute,but this is a newer tax thing that has,been added in the last few years,that you want to make sure if you're,doing a higher volume of e-commerce,sales online,that you're being really mindful of so,first off when you're setting up,charging sales tax by a,physical store location you can do this,inside of the shopify backend,so you would just go to settings and,then taxes and you can add in your tax,location there so you would add in your,zip code,so it'll add in the correct tax,information,based on the state that your physical,location is in,so this is an important one to make sure,that you have set up so that it's just,calculating taxes,overall based on the physical location,but as i mentioned before you also need,to keep in mind the economic nexus,so this is different for each individual,state which can be a little frustrating,since the us has so many states to keep,up with,and shopify really isn't set up for,going through and keeping track of all,this information,plus shopify does not file any taxes for,you,it's just charging the customer and it,is on you,and your responsibility to make sure,that you are setting aside that money,for taxes,and paying that correctly to each,individual state,so for this i really recommend a,third-party app called,tax jar so tax jar lets you actually,see the economic nexus so you can see,how much,you are getting close to that of needing,to collect sales tax in particular,states,so it'll keep track of how many,transactions you've had in a state,how much revenue you've brought in in a,state,so it's really helpful for keeping track,of all of that information,so that you don't have to have a huge,spreadsheet that you're constantly,updating with every new order also with,the tax share app they do,automatically file taxes for you once,you've got that set up so once you have,registered that you need to file sales,tax in a state you can then put all that,information into tax jar,and get that set up so it's a lot easier,for you especially if you end up having,to file taxes in a lot of states,based on your online orders and revenue,so i definitely recommend,taking a look at tax jar if you are,expecting a high volume of orders,and you are expecting to have more,things that you're qualifying for in,terms of different states that you're,needing to pay taxes on,i'll put a link to it in the description,below but definitely an,app to check out so that's just the,sales tax portion of it all though you,as an individual,will have to pay taxes on any income,that you have received from your,business,so this is going to depend a lot based,on how you have your business set up,if you are set up as a sole proprietor,so as an individual,if you are an llc a single member llc,an s corp a c corp however you have set,up your business entity,that really depends on how the taxes,that you are having to pay,are structured out so i'm not going to,get into all of that again make sure to,reach out to a tax accountant and make,sure that you're,paying the correct taxes for you but,overall you need to pay taxes on any,income that you have received from the,business,so you can write off things like,expenses so your cost of goods of any,kind of,cost of actually shipping out the or,fulfilling the product itself of the,shipping cost,any marketing costs like paid,advertising or if you've hired,independent contractors to do designs,for you you can,deduct all of those as expenses from the,business account,and you don't have to pay any taxes on,that income that is there,also any income that you leave inside of,the business for,future months of running expenses you,don't have to pay any,income tax on that as well it's just the,money that you're taking,out personally as profit from the,business and again,that does vary really wildly based on,the,entity structure that you have set up,for your business,so overall you just want to make sure,that you are reaching out to a tax,professional in your area,and that you have everything set up the,last thing that you want,is to be hit with a huge tax bill that,you weren't expecting and you don't have,the money set aside for,that one's gonna hurt really bad and,it's going to,hamper your business growth if you're,then having to take additional money,from the business,or from your own personal accounts to,pay off taxes that you hadn't prepared,to pay for,so you want to just make sure that,you're thinking ahead and setting aside,whatever money that you're collecting,for,taxes whether it be sales tax or income,tax that you're going to pay,personally so i hope this video was,helpful for you,in deciphering a little bit more about,the different taxes,that you have to pay for a small,business and for e-commerce stores,we've got a couple more videos over here,all about growth strategies so how to,actually grow your shopify,store for 2021 and if you haven't yet,subscribed to this channel make sure to,hit that subscribe button below,we post videos every week all about,shopify and how to grow your online,store

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