Episode 022: Q&A 10

sales tax solo show Dec 17, 2019

On this episode, I answer the question "I just sold my first photo album and I collected sales tax. Now what?"

The short answer: Check your state requirements. Most states will allow you to file you online and require you to do so once per year, quarter, or month.

If you need more sales tax info, make sure to circle back episode 21.

I’d also love for you to join the Tax Challenge happening in next month to help you get all your docs ready for tax season.

Episode Transcript

022: (00:01)
Hello and welcome to episode 22 of the unfuck your best podcast. As always, this is your host, Braden. Very excited to have you here today. Today we will be talking a little bit more about sales tax. Get super excited. So last Thursday on the podcast, I interviewed my friend Amy, who is an absolute expert when it comes to sales tax. So we talked about sales tax, a one Oh one. So this topic is of interest to you, or maybe it's not an interest. You could give a shit less about sales tax, but you know that you have to know about it for your business, either of those camps that you fall into. Go back, listen to episode 21 on the podcast with Amy. Hey Sam, let's cut that out. Sorry my dogs making all sorts of noise up in here today, guys. Alrighty. So back, back to business.

022: (00:53)
If you're new to the podcast, the way this works is every Tuesday I called them the even episodes. So 20 2224, you get the picture. I take a question that has been posed in my Facebook group, uh, whether it's uh, excuse me, illegal or a tax question and we cover it here on the podcast. So I would love for you to join the Facebook group. You can drop a question that I might cover some time. It is called a Brayden's besties, B, R, a, D, E N. Brayden's besties on Facebook. Search it, join, ask a question. Let's be friends and hang out. So let's just dive straight in. The question I got that we will be tackling today is, and I quote, I just sold my first album and I collect attacks. Now what? So congratulations, whoever asked this question. That's really exciting. I am going to assume that we don't have a lot of context here, but based on my audience, I will assume that this is a photo album for a wedding photographer.

022: (01:51)
Could be an album for boudoir photographer or a portrait photographer guests. It doesn't really matter, but we'll will, we will assume that this is a photo album. I don't know what state this person is from. So we can't even say for sure whether they owe sales tax on this album in California. They certainly would, but it is dependent on the state. And Amy and I talked about that and the Thursday episode. But essentially once you've collect the tax, if you owe it, all you have to do is go pay the sales tax. I know a little easier said than done, but the way that works is in States like California, we have sales tax filing requirements and the requirement depends I believe on your gross revenues. So taxable sales basically, and you have to file either annually, quarterly or monthly, I believe. And again, uh, Amy's the real experts on this sales tax, I've researched it a little bit, but I believe that most individuals fall into that quarterly, that quarterly requirements you need to file your sales tax.

022: (02:55)
We turn on a quarterly basis and when you file it, you pay at the same time. The most important thing really to understand what sales tax is, that it is not your money at all. So income, we often say income taxes. And it really your money. Technically I would disagree. When you get paid by a client, all of that money is yours. But then a, you pay income tax based on your gross income. It's still, it goes into your bank account, sales tax. We want to look at it as it's not your money at all. It is a tax that you're charging on top of your prices for your products or services that you are just pre collecting for the government. So it's the government's money. You're essentially just holding it like in a holding cell for them. So this is why I really recommend having a separate bank account for your sales tax and doing a sales tax transfer once a week or once every couple of weeks.

022: (03:47)
So in short, what you do is you do all of your sales and then you look, uh, whatever deadline you want to do. And maybe every Friday, maybe the 10th and 25th of each month, which is what I tell all of my profit first people to do it. That's what the book teaches. And you look at how much sales tax you charge to clients. Then you transfer that money to your sales tax account and then every time your sales taxes are due, you can go and file your return and the return should show, hopefully if you've done it right that the amount you owe is the same amount that's set aside in that bank account and then you can pay it. So that's how I recommend doing this. Maybe you will have Amy talk a little bit more about that the next time she's on the podcast.

022: (04:33)
But the first thing you really need to do is do some research and digging into your own state and figure out when you are required to file and pay your sales tax. If you don't know when you need to pay it, then that's obviously the biggest issue. So figure that out. Go from there and dig into the resources. You can contact your state for more information or figure out when you need to pay it. And if something else is still confusing, come into the Facebook group and drop that question and I will add it to the podcast list. So that's all I have for today. But before I leave you, I want to let you know that I have a tax challenge coming up in January. I know that we are not at tax season yet. You guys probably don't want to think about your income tax return that's due on April 15 but I wanna encourage you to knock it out sooner rather than later.

022: (05:24)
And in order to help you do that, I'm doing a free four day tax challenge each day. You'll have about 30 minutes worth of tasks to do and the goal was that by the end of that week, you will have all of your ducks in a row, so to speak, to be ready to file your tax return. So you're bookkeeping up to speed, your statement's ready, all of that kind of stuff. And then at the end of the week, you can either take all of that stuff to your CPA, your tax professional, to me if you're local and they will be very happy that you are well organized and have everything ready or you will be ready to sell, file your tax return and do so in a much, uh, much more stress free manner, or I should say less stressful manner. I don't know if if tax filings is going to be stress free for any of us, but we can make it as seamless as possible. So join the tax challenge. It will [email protected] forward slash tax challenge or you can just find it on the podcast website, unfuck your biz.com go there, sign up. Let me know if you have questions. And as always, thanks for tuning in. I will be back in your buds on Thursday. I have a good one.

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