what is my shopify tax rate

in this video i want to teach you how to,set up your taxes settings which is,really really easy you're going to be,able to do it very quickly you may not,even have to edit anything because the,default settings are very close to what,my settings already looks like,so to get to the taxes settings you're,going to click settings at the bottom,left here which will bring you to this,page,then you're going to click taxes,right here which will bring you to the,taxes settings,before you do that however go to your,general settings and make sure you have,a correct address in there so,for example i live in california within,the united states so my address is,california and in the united states,right then go to your taxes settings the,reason i want you to set your address,correctly is because taxes are,calculated based on where you live,so i'm going to click taxes now,and it's going to bring me to this page,okay so for the most part these are your,default settings,please keep in mind that i live in the,united states so my taxes page looks,like this if you live in a different,country,for example if you live in mexico or you,live in say somewhere in europe then,your page may,look very different than mine,but for the most part i think it should,be the the guidelines and concepts here,should still apply to you so let's take,a dive in,so you got tax regions and tax,calculations the regions here are the,regions for which you would tax if,someone from that region came to your,store and bought an item so i'm in the,u.s i s let's say i sell t-shirts and,someone else from the us comes to my,store and buys one of my t-shirts,because they're in the united states,they i would collect taxes when they buy,that one product,you'll notice here that says the rest of,the world meaning everywhere outside of,the united states and it says not,collecting,so generally my settings do look like,this i want to point out that that,for most countries if you sell products,you're going to have to pay taxes in,some form,in the u.s it's very very common for,someone to buy a product online,and then have taxes added to that,product when they check out,the reason i don't collect taxes from,people in other parts of the world is,because,i sell to a lot of people from all sorts,of different countries and i don't know,the culture,for each country i sell to some,countries,you know they don't pay taxes on the,products they buy so i don't want to,collect taxes from everybody because if,i if i collect taxes from someone,that's from a country where they don't,generally pay taxes on products they buy,online they me they may be very upset,and i don't want to upset any of my,customers so,for the sake of not upsetting any of my,customers i simply don't collect taxes,from any other countries,but i do collect taxes from people from,the united states,you may be wondering well doesn't that,mean you'll be losing money at the end,of the year when i file my taxes,yes and no,although i don't collect taxes from the,rest of the world,i set my prices my profit margins large,enough and high enough,so that i make such a large revenue on,each product i sell that when i go to,pay my taxes at the end of the year i,will have enough revenue to pay for,those taxes and still make a profit,so if you're worried about,how if you're worried about making a,profit and not collecting taxes just,make your price large enough to,incorporate any taxes you'll have to pay,back later um to your government okay,tax calculations so earlier i said to,make sure to set your pricing in the,general settings i'm sorry set your,address correctly in the general,settings and that's because tax,calculations are based off where you,live okay,so,there's a couple options you can choose,here i don't i don't check back i don't,check any of these things the first one,is show all prices with tax included,what does that mean,this means that taxes are included in,the prices,when someone visits your online store i,never ever include the taxes in my,prices because in the u the united,states it is not that is not common,practice generally if you're if you have,online business and let's say i sell,t-shirts and i i sell each t-shirt for,ten dollars exactly,if someone were to come to my store and,they saw the shirt for ten dollars and,they put in their shopping cart and they,went to go check it out and taxes were,then added on top of that ten dollars,that customer would not be upset because,in the united states that is very common,for taxes to be added on when you go to,check out online,so,it is very common in the united states,to not include taxes in the visible,prices of your store,taxes are always added when you check,out later,uh charge tax on shipping rates uh,because we're drop shipping i don't,charge tax on shipping rates because,you know,we're drop shipping we we don't have to,package up the product we're not,responsible for shipping someone else is,going to drop ship that product to the,customer for us and we've already set,profit margins and prices that,incorporate that shipping so i'm not,really worried about taxing my customers,for shipping rates the less you could,the less you tax your customers i feel,the more happy they will be the more,you know because they're not going to,get any price that's unexpected the,price that they see online will be close,to the price that they'll see when they,check out and i think that's a good,thing and it makes your customers happy,and then this last one you can ignore,because this is more for digital,products and we're not selling digital,products,so like i mentioned for the rest of the,world i do not collect taxes from them,so i don't i just leave this as it is,for the united states,customers i do collect taxes from united,states customers i'm going to click edit,to go a little bit further just to show,you but you don't really have to do,anything in here shopify already,calculates taxes automatically and they,calculate it based on the address,which you set up in the general settings,which i mentioned a couple times already,i put,i put my address here as california,and you'll see that the word the the,state california shows up here because,this is where i live and my taxes are,going to be calculated based on the fact,that i live in california if i lived in,new york,which is a different state in the united,states then my taxes would be very,different because in the united states,each state california new york florida,they all have,separate federal they have they all have,separate,they all have separate state taxes,so in california i guess the state tax,is 7.25 percent,um,so i just wanted to point that out,but that's pretty much it it's very very,straightforward you'll notice that i,didn't really edit anything,if i wanted to i could add a text,for the rest of the world customers but,i'm not going to do that because again i,don't know if it's common to tax people,from every single country because i'm i,don't i have not lived in every single,country so i don't know what the,expectations are,so i'm just going to leave it as is you,could even remove taxes from the united,states if you wanted to to make your,customers even happier but i think it's,pretty common in the us to pay for your,taxes,when you buy a product online so i would,just leave that and not worry about it,and there you go now that you're,charging taxes at least in parts of the,world you're going to use that tax money,to help pay off taxes at the end of the,year and it's going to help you a lot,all right guys i hope that was useful,i'll see you on the next video,i almost forgot to mention another,reason i'm not really worried about,collecting taxes from the rest of the,world is because most of my marketing,channels,so for example my facebook advertising,they're all directed at the united,states generally i market to united,states customers the reason i do that,and i'll get that i'll get more to that,during the marketing section the reason,i do that is because i'm from the united,states and i under the i understand the,culture in the united states i can,create a really good advertisement for,united states customers because i,understand them better than someone from,another country let's say mexico,so because majority of my customers not,all of them but the majority of my,customers are from the united states i'm,going to collect taxes from them so i,could i actually collect taxes from the,majority of my customers because i,market to united states customers and,united states customers are the customer,base that i collect from,um however because a lot of my facebook,advertising is goes viral sometimes and,whenever you have an ad that goes viral,you may get other facebook users from,other countries that see your ad so,sometimes i do have customers from the,rest of the world i would say actually,still have a good amount but i'm not,really worried about collecting taxes,from them again because i don't,understand the culture and i don't want,to upset them by collecting taxes and,number two they only represent a,minority of the customers that come to,my store so at the end of the day,i still collect taxes from the majority,of my customers and i don't collect,taxes from a minority,subset of my customers so all in all,when i go to pay taxes at the end of the,year,i should have a good amount of extra,change from the club from the taxes i've,collected from u.s customers to pay off,those taxes at the end of the year so if,uh you want to collect taxes,you know from the majority of your,customers just target your,advertisements and your marketing to,whatever countries you are,set up to collect taxes from and you,will have a good amount of,extra revenue to pay off the taxes at,the end of the year all right i hope,that made sense i'll see you guys on the,next video

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