Sales Tax

[Sockdiva]

Hi! I've now heard this a couple of times...too small to worry about keeping track of inventory, or supplies, and such. What exactly is too small? It's just me, no employees, but I got a resale license when I passed that magic # to be a hobby anymore. But the idea of keeping track of every  bead and scrap of fabric is crazy!

I'm filling out a request for a consultant from our Small Business Development Center, but they may not even want to bother with a little craftser like me!

I finally understand about accrual and writing off only what supplies I've used in what I've sold, but what about supplies? It gets recorded as what? Do I really need to keep track of this for taxes? I'm willing to do it for inventory of jewelry I've made, but do I have to do anything with my supplies, except keep receipts to prove the cost of materials used when I sell something I made with it?

[PinkyK]

I keep track of my supplies by keeping my receipts so when I do my federal income taxes I will be able to write off my business as a loss. I KNOW I spent more than I made for sure! I'm really hoping that this won't be the case next year.....but until then I'll take the deduction!

[ksew]

So.. yet another question. I live in MA. I have a sole prop. and I use my SS# as my tax ID. So what that means is that really I never got a tax ID. Now, my question, because I just did my taxes, is this.... I have online sales only. I only charge sales tax to customers in my state (MA). Now, how am I supposed to pay this sales tax back to the IRS? I have read in this thread that everyone says you are supposed to file monthly, then quarterly, etc. but .. where? and how? and what is this form called? And someone also said the IRS sends the form directly to you? Am I not getting this form because I use my SS# as my tax ID? And lastly, I just did my taxes. I only had 2 customers this past year from MA so I only collected $2.85 in sales tax. What am I supposed to do with that, and where do I file it? Sorry if this is redundant, I'm just not understanding the process.

[jlyarnworks]

ksew, it sounds like you're using your SS# for filing income tax. To file sales tax you'd need a tax ID#. That's how your local govt keeps track of you. It allows you to tell them how much you think you'll make this year (so they can determine how often you need to file). It allows you to be tax exempt on supplies when you shop. Some craft shows also require a tax ID#. It also allows you to register your business name in your state so that no one else can steal it!

On our state sales tax form I list my total sales and then subtract out of state sales. What's left is the in-state sales I pay tax on.

Also, someone else asked earlier about supplies purchased out of state. I just got a flyer saying that I need to pay use tax on anything appropriate I purchased from out of state (tools, supplies for samples, etc.), but not regular supplies since I wouldn't pay sales tax for those in-state anyway. Does that make sense?

Jackie

[AttackOfSteph]

All this is sooo confusing!

I am thinking about opening an Etsy store, who knows if I'm gonna sell anything... do i really need to get an tax id # and stuff if i might sell $5 of merchandise?

[julie524]

I know this isn't about Sales Tax, but it's about something that was mentioned in some replies. I emailed Guest Services at Jo-Ann Fabric's last night about the discount card and this is the reply I got.

Thank you for your communicating regarding our business discount program.  We do have a VIP 15% Discount card that is extended to those individuals that have a valid tax exemption status. Please provide your local store a copy of your current resale tax exemption certificate to receive the VIP Discount Card. The new VIP Discount card replaces the previously issued Commercial Discount Card.  The discount card can also be used for purchases at joann.com.
 
You will need to have your exemption status on file at each location in which you do business for audit purposes.

So now there is only one card and not two. I thought I would post their reply so that everyone that is wanting to get a card doesn't have to email them about how.

[NyteRayn]

Yes, I do this at Joann's too.  They just type in my number in the register and I don't pay sales tax on items I use to make things I sell.

At the Joann's here in Connecticut, they take off the sales tax and they also give me a 15% off coupon. Makes a HUGE difference in my cost for materials over a few months.