Sales tax for Shopify sellers - what you should know

hi, i'm veronica wasik, with five minute bookkeeping, and i help shopify sellers to set up, organize and streamline their financial systems, whether you're looking for diy done with you or done for you financials- and in this video, i am toking to my shopify sellers about sales taxes and what you need to know about sales taxes so that you're not so scared about them. so let's go ahead and get started. [Music]. so, as i mentioned, i work with shopify sellers and i help them to set up and streamline their financial systems, and by far the question that i'm asked all the time is: how do i deal with my sales taxes? what do i do about sales taxes? i don't know anything about it. so i put this video together to explain to you the essentials of sales taxes for shopify sellers, so that you can begin to demystify all the confusion that's there, as well as all the the fears that are there around filing sales taxes. so let's get started with number one. number one: shopify does not remit or file sales taxes for you. you may already know this, but um, you just need to make sure that you understand that shopify does not track whether you have met any of the various state filing requirements for filing sales taxes, so it doesn't track it for you. you can run reports that will tell you the sales that were made in different states, but it doesn't keep track of it for you. shopify will collect sales taxes for you after you have set up those taxes in shopify. so once you know which states you will need to be filing in and once you register- and i'll tok about that in just a moment- then you can set it up in shopify. number two: nexus. what is nexus? nexus is just a fancy word for basically saying that you need to file sales taxes in a partikular state. you may have a physical nexus, which means that you have a physical location in that state, and you may also have economic nexus, which basically applies to online sellers, meaning that you don't have a physical location but you are selling to a state that collects sales taxes for online sellers. so if you have met the nexus requirements in the state, then you need to see whether you qualify to to collect sales taxes and in that case you must meet the minimum thresholds to be subject to collecting those sales taxes. when it comes to economic nexus, which applies to most online sellers, then there are different thresholds that you have to meet. it all depends on the state. it may be based on the number of transactions, or it may also be based on the dollar amount, or it may be based on both. number three: register to collect sales taxes. once you have met the threshold to collect sales taxes in a state, then you need to register to collect sales taxes. i highly recommend using a sales tax registration service, such as sales tax and more, and i have linked them in the description for you. number four: set up sales taxes in shopify. once you have registered in a partikular state and that registration has been processed, then you will need to set up the sales tax in shopify. go to settings taxes in shopify and set up each state in which you have registered using the sales tax rate they provided you. number five: remit sales taxes. you have a few options for remitting your sales taxes. one is to do it yourself. i don't really recommend doing this if you are needing to file in multiple states. if you're just filing in one state, you might be able to, but, um, be careful because you're not a professional. another method is to use an app. i recommend tax jar and i will link them in the description box for you. and the third option is to use a sales tax filing service. i recommend sales tax and more, and i will also link them in the description. okay, so that was the five essentials that you need to know about your shopify sales taxes. i'm veronica wasik, with five minute bookkeeping. are you ready to work with a trusted and reliable shopify accounting pro? if so, then check the description box below to learn more about my services and how we might work together. if this content is helping you, make sure that you subscribe, ring the bell and give me a thumbs up. check the description box below for all of my free resources, including my free shopify bookkeeping blueprint and the link to join my facebook community, and i'm here to help you, so let me know in the comments if there are any other topics that you'd like me to cover in the future. i'm veronica masik. i'll see you next time.

Taxes for Shopify Store Owners

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 toking 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 toking about taxes. i am just toking 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 toking 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 tok 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 toking 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 us, 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 tiknically 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 partikular 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 automatikally 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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Collecting Sales Tax in Shopify | Out of State Requirements

[Music] foreign collecting sales tax in Shopify. this confuses a lot of people. does Shopify have a setting where you can immediately collect sales tax from your customers when they make a purchase? should I collect sales tax in every single state that I receive an order from? these are the types of questions that I will be addressing today in this video, but before I begin, I do want to throw out out a little disclaimer that I am not a public accountant and you, of course, should always consult with your own accountant to make sure that you and your business are collecting sales tax in the correct way. but in this video today, I do intend to give you a little bit of insight so that you can go into that conversation with your accountant, understanding some of the basics. so let's begin. does Shopify have a setting to immediately collect sales tax from your customers when they make a purchase? yes, should I check to see what my settings are set to because they might not be correct? yes, should I collect sales tax in my own state from day one? yes, unless you live in Delaware, New Hampshire, Montana or Oregon. should I collect sales tax from every single state, from every Shopper in all of the states, when they make orders from me. well, that depends, and let me explain why. so you, as a business owner, need to collect sales tax from customers and states where you have a tax Nexus. let me explain what that means. tax should be charged in the state you are registered in and any other state that you sell high volume to. next, this is based on number of sales and or dollar amount of sales. let me break this down further for you and then I will show you how you can check your own state requirements and requirements for other states you sell to. when you're starting out and haven't made very many sales in other states, you should only charge tax in the state that you have a physical presence in, unless you live in Montana, New Hampshire, Oregon or Delaware. if your sales are low in another state, then you have not yet qualified for tax Nexus. so that means that in your Shopify settings you should only list your own State as the state to collect sales tax in. now an important note: if you do not have a sales tax permit in a state and you charge sales tax for Shoppers in that state, you can get audited. let me repeat that if you do not have a sales tax permit in a state where you have shoppers shopping from you and you still charge sales tax to those Shoppers, you can get in trouble. you tell Shopify which states to collect sales tax in now. if you're receiving an order from someone who lives in another state than you and you do not have a presence in that state and it is your first time ever receiving an order from a person in that state, then you do not need to collect sales tax now. eventually, when you start to grow and your volume and your sales increase, you need to be on the lookout for when it is time to start collecting sales tax, and that will depend on the threshold for the state. so every state has different requirements based on certain thresholds. let's walk through an example. I live in Georgia and let's pretend that it's my first year in business. I could either be online only and shipping products to people in other states, or I could have a physical brick and mortar in the state of Georgia. this scenario applies to either situation. so let's pretend that I start to make sales to Shoppers in the state of Florida. I've only made twenty thousand dollars worth of sales in Florida. at this point, I do not need to obtain us sales tax permit in Florida yet because I have not met the threshold to need one. I have not met the tax Nexus in Florida yet, but let's fast forward four years. let's say that it is year four. I have now sold a hundred twenty thousand dollars worth of Revenue in the state of Florida and at this point I officially need to obtain my sales permit in Florida and I need to start collecting charging sales tax to Shoppers in Florida, because the threshold for Florida is one hundred thousand dollars worth of Revenue. once Nexus is achieved, you do need to start charging sales tax and you need to change your settings in Shopify to make sure that it is immediately collecting sales tax in the states that are applicable now. each state is going to have their own thresholds. let's change up the scenario. let's pretend I'm still in Georgia, but this time I am making sales in Ohio 's thresholds states that I must start collecting sales tax when I've made a hundred thousand dollars in revenue or if I have surpassed 200 transactions. in this case, if I had only collected eighty thousand dollars in revenue from Shoppers in Ohio, but I have had 200 transactions, then I need to start collecting sales tax and obtain my sales tax permit. so it is important to understand the thresholds for each state. New York, for example, has has a threshold of five hundred thousand dollars in revenue or 100 transactions. another example would be: if I have a physical brick and mortar in the state of Georgia and Florida, then I need to collect sales tax in both States, regardless of my revenue and regardless of how many transactions I've done. if you are still confused or you just want to check out which thresholds apply to you for each state, there is a website that you can use that will walk you through an assessment to determine which states you need to collect sales tax in. I will demonstrate it now and I will link to it down in the description bar as well. but once again, I just want to call out that it's really important that even after you've gone through this assessment, you should still tok to your accountant to make sure you are setting everything up correctly. okay, so what you're going to do is come to this website and you're going to scroll down until you see: take the free assessment. so I'll go ahead and click on that. from here. it's going to say that I can start my free Nexus assessment. I'll click get started first up. it's asking me where I currently collect and remit sales tax. notike that Delaware, Montana, Oregon and New Hampshire are not available choices because you would not be collecting sales tax there. so let's pretend that in this scenario I am based out of Kentucky, so I'll click that. if I was currently based out of two locations or I was already collecting sales tax in another location, I could select it. but I'm going to go ahead and click next. now it wants me to select where I make sales but don't collect sales tax. so if there are states that you sell to more frequently, you can select those. I'm actually going to go ahead and select all so we can demonstrate what that looks like. but once again, you'll just select the states that you already have purchases from. now I'm going to click next. and here it's asking me: how much do you sell in these states? so it if I were to have sold more than 250 000 dollars in total revenue in Alabama, I would select Alabama. if I were to have sold more than a hundred thousand K in total revenue or had more than 200 transactions in Alaska, I would click Alaska and I would continue on selecting all of the states if I've met that threshold. if I haven't met the threshold in any of the states, I will not select any. I will leave them all blank and I will click on get your results. now it's going to ask me to fill out my information to show me the results, and now it's showing me that I have not exceeded the annual threshold in any of the states. but I do need to watch all the states in yellow and I currently collect and remit sales tax in Kentucky and if I were to scroll down, it would show me all of the states that I'm approaching the threshold in. so remember I haven't met the threshold on these yet, but I need to keep an eye out for when I do so. this information here is very useful and and you should refer back to it because there are a lot of details about the threshold that you can read through for each state and make sure that you work with your accountant to make sure that you are doing everything correctly. [Music] [Mu.

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How To Charge Taxes On Your Shopify Store | Easy Method

how do you charge sales tax on your shopify store, how do you pay your sales tax and all that stiky stuff coming up in today's video? hello, hello and welcome back to the channel. if you're new here and we don't know each other, you've never met me. my name is carrie, i'm the founder of shirt school and i created this channel to bring you the best strategy, secrets and hacks to grow your online t-shirt apparel or print-on-demand business, and in today's video, we're once again toking about my favorite thing in the world: taxes. if you're anything like me, taxes just give you a headache and they're just constantly frustrating and it just feels like i'm always paying taxes, so taxes really stink. but luckily, today we're going to specifically be toking about sales tax on your shopify store and i'm going to show you the easiest way that i've found to collect it and actually pay it to your state and how that all works. this is a question i get all the time like gotta be. one of the most asked questions is about sales tax and how to collect it, when to collect it and how to pay it- all that kind of stuff. so hopefully today i can bring some clarity to this question and help you out. the first thing i want you to know about sales tax is that you only pay sales tax on sales that you make inside your state. okay, that's one of the beauties that we have being an online business is that we don't just sell in our state, locally. we sell all over our country and maybe all over the world, and we don't have to pay sales tax on any sales outside of our state of residence. they call this sales tax nucleus, and so you have to pay taxes in any state in the united states where you have nucleus. now that basically means you just have to have like an office or some kind of residence there, right? so for most online businesses, especially small businesses, you're only going to have that nucleus in one state. wherever your business is located, even if you're running from your home, you're going to have to have a physical address, and so most likely for most of you, that's going to be inside your state only. to use amazon as an example, amazon has fulfillment centers and offices all around the united states, so amazon has to charge taxes in most states in the united states. that's why, even though amazon might be based in a certain place, they have, since they have facilities all over the us. they have to pay sales taxes on all the sales in those states, but luckily, since we have a small online business, you most likely only have that one location and so you're only going to pay sales tax on the sales that you make inside your state of residence. okay, the last thing i want to say- and then we'll get into the tutorial on actually how to set this all up in shopify- is that i've said it a lot and it's another question i get that's very related, and i recommend that you don't get your llc or your business licenses before you actually have some sales under your belt. right? i recommend that you get started on shopify without doing all of the the llc's and business licenses and sales tax permits. go ahead and get a few sales under your belt before you actually get your business license and you start paying your sales taxes. you want to make sure this is something that you want to continue with. so a lot of people really stress out when they're first starting and luckily you don't need to stress because you can actually claim: you know, put your under your social security number on your taxes. you can put your sales under there. you don't have to worry too much about sales tax when you're just starting out. but once you have some sales and you know that this is going to be something long-term for you and that you're going to stik with, you want to make sure you do get your llc, get your business license, get your sales tax permit and you start paying that sales tax each month. if you are just starting out, you're brand new and you're watching this video and you're like: i don't have my business license. okay, i recommend that you go ahead and set up sales tax in your shopify account so that you are collecting it. but go ahead and just set it aside. hold on to it, just in case you need to pay those sales taxes later. that's what i recommend. you don't necessarily have to do that, but even if you don't have your business license, i would just turn it on, collect it, put it aside, maybe in a separate account, so that you're not tempted to spend it, and just so you have it there in case you need to come back and pay those sales taxes. hey, if you're getting value out of this video, smash that like button and also make sure you subscribe to the channel and hit that bell icon. when you subscribe and hit the bell. you're gonna get notified each week when we put out videos. now, as much as i hate toking about taxes, i know you love hearing about it, so i plan to put out more videos related to this kind of content. so if you want to see that, make sure you subscribe back to the video. okay, jumping into shopify inside of uh test account that i have here. i want to let you know setting up sales tax in shopify is actually a very simple process. a lot of people get really scared of how to do this, and it's- it's actually pretty simple. so all that you want to do is go to your settings here and you're going to want to go to taxes right there, right, and so we have, uh, some different options here. you're welcome to look through these and see if you you want to use any of those options. what we're going to want to do here in the united states, we're going to want to go right here and hit setup. okay. now the great thing about shopify is, once you set this up, it's going to automatikally calculate all the sales tax for all the counties in your state and it's just going to do all the hard work for you. so you're going to hit this collect sales tax button and you're going to select your state of residence- and i will select oklahoma, right here- and then we're going to simply hit collect sales tax. okay, you don't have to put in your uh, your actual sales tax id. you can go ahead and start collecting it without that and put that in later, as you saw me do there. so after you've done that, that's it. that's all you have to do in shopify. so after this first step, your customer is going to have to pay the additional sales tax on any purchases that they make if they are inside of your state. this is not a big deal. if somebody, if you go down to the convenience store, you buy something, you're going to expect to pay sales tax. so here in oklahoma, for instance, if i have somebody joe down the street that buys something from my store and he's in oklahoma and i'm in oklahoma, he's going to expect to, say, pay sales tax. so once you've set this up, your store is already collecting sales tax. you don't have to do anything else on your shopify store to actually collect the money. i do want to make sure you understand that shopify will not pay your sales taxes for you. they are simply going to collect it from the customer and give it to you and it's just going to get lumped in with the revenue that you're making and you're collecting from your sales. so you're going to have to actually put it aside and not spend it, so that you have the money there to pay your sales tax. step number two: you're going to want to find where you pay sales taxes inside of your state. now, keep in mind: you only want to do this if you already have your llc, your business license and your sales tax permit. okay, you have to have that before you can do this. so make sure you get your business license, get your sales tax permit. then you're going to want to find where you pay taxes. okay, here in oklahoma, it's okay, tap. this is the website i know most of you guys aren't watching from oklahoma, but just to give you an idea of what this looks like. now, here in oklahoma, we have to remit our sales tax every single month by the 20th of the month for the previous month. so all you're going to want to do here is simply get your- uh, your account set up with whatever, whatever website for your st.

How to Calculate & File Sales Tax with Shopify

what's good y'all, welcome back to my channel. it's your girl starring alexis, and i'm back again with another entrepreneur video. so today, this video is for my business owners. um, i have two separate videos i'm going to do. i'm going to show you guys basically not show you guys that kind of like- tell you guys the basics of getting your sales tax and everything together, um, if you are using shopify as your um website platform, um, and then i'm gonna tell you guys basically what my experience has been with dealing with sales tax and just my horror story. so, um, i wanted to do this number one because when i first started using shopify, i told you guys, um, i didn't quite understand the taxes. that was one of the things i didn't understand at all. um, so that, and then also i have figured it out, um, and basically just figured out how to use the whole system and everything. so this may be a different process for you depending on where you live, but for texas, i'm gonna tell you guys, um, what i specifically know. so, um, we're just gonna get right into it. i guess maybe i'll screen record on my computer while i'm doing this, but yeah, we're just gonna hop right into it. i'm not sure if this is like in every state, but in texas we have a texas comptroller. um, they basically handle everything with the llc's. so basically the comptroller it's not a person, it's kind of like a- i don't know how to explain it. um, it's basically like the tax collector bookkeeper type of business for texas. like i said, i don't know if everybody's um state has this, but if you're curious, um, you can um basically just google your state and then type in: say you live alabama, alabama comptroller, or even if you do alabama sales tax permit, and it'll tell you, basically give you all the steps on how to sign up. so for texas specifically, it is comptrollertexasgov. um. so i'm going to pull that up so that you guys can see it. um, i have my laptop right here. so basically, in order to file your sales tax, you have to have a sales tax permit in the state of texas. so the first thing you're going to have to do is apply for your sales tax permit. once you're accepted, and all that stuff you're going to be responsible for filing for your business. basically, um, at the end of every quarter- so there are four quarters that you're going to make- um want to make sure that you're um filing, for. it is january, february, march. you have to file by april 15th and then the next one is going to be due june 15th, i believe, and you're gonna do for the months before that, um. then it's september 15th, the months before that, um, and then it's going to be the next uh date is going to be january 15th, um, going into the next years. you're going to go to your comptroller website and i'm a little sick, so bear with me. that's why it's taking me so long to get this video done, because i was trying to wait till i at least sounded a little bit decent, um. so i do want to let y'all know right now that shopify does not file your taxes for you. it collects them when people buy from your store, but it does not, like i said, file them for you or pay them for you. so, even if you have your sales tax on being collected, it's just data being collected. shopify collects the data, so you know how much you're gonna have to pay or how much you're gonna input when you are um doing your report, when you're reporting your sales tax, but that's literally all that they do. so, um, i am at the home page of my comptroller website, um. so at the top um, it just says different things: tax, transparent transparency, economy, all that. i'm gonna go to taxes and you guys see it says sales tax. so i clicked on sales tax um, and these websites are pretty informative. so if you just go on there, it kind of gives you a step by step what you should do um. so i'm going to scroll right down and you guys see that it says apply for sales tax permit um, and it takes um up to two to three weeks to receive your permit um, and then you just apply for the permit um. like i said, i don't know if this applies for everybody, but um, there's a e-system or web file, um website that the com trailer basically uses to have all reports and everything done. so once you get your sales tax tax permit, you're going to assign taxes to yourself. so, as you guys can see, um, mine is already down here. but um assign taxes. you put your taxpayer number um it'll pop up. you basically assign yourself the sales tax or the franchise tax. the franchise tax is for your llc um, but the sales tax is for your sales tax. basically, when that quarter comes up, you're going to log into your account um, and you're going to click file and pay um. and it's going to say you're usually going to click file original return um. of course mine is going to say there's no um returns available right now. but the return that the return period that you're currently in is going to pop up. you're going to click it. i'm just going to give you guys an example of what it looks like: um. once you click it, it's going to ask you: are you taking credit to reduce taxes on this return? um. i usually just put no um and then i did not refund any sales tax for this filing period. so i click no again um. and then here is going to ask you: what is your total sales tax? um, basically in your state. so for texas um, you're just going to put the whole dollar amount, um, and once you put that in, it's going to calculate how much in sales tax you're going to need to pay. so this is where shopify comes in. so for shopify, you're going to want to go into your account. so once you get into your store you're gonna go to your analytiks um. shopify does allow you to basically click um for the first quarter, second quarter, third floor or third quarter or fourth quarter. okay, so you're going to go to the finances section. you're going to go to total sales, um, and then you're going to go in the tight top right hand corner and you're going to click which quarter um you are looking for now. um, you can download this report, but you're going to have to go through this report and basically calculate how many um total sales you had in your state. so for me, um, i would basically calculate um all the way down, all the way down for that quarter, how many sales were made in texas, and then i would submit that whole number um into the texas total sales. once you do that, you're going to click continue. if you did not have any sales in that quarter, of course you're going to click no sales um and then you're going to scroll down, your report's going to come up, it's going to tell you how much you owe um and then you're just basically going to file that. so you're going to need to do this um four times for each quarter out of the year. that's basically um. that's basically the gist of it. now for the quarters, just to give the correct dates again, um, you're gonna your first. your first quarter is due april um, and it's for january through march um. your next quarter is due in july um, and that is from april to june. you're going to report in july. in october you're going to report for july through september and then in january of the next year you're going to report for october to december for the year that just had passed. so, yeah, that's pretty much how you're going to set up your sales tax permit and how you're going to file your sales tax um if you are using shopify as your um website provider. um. i will definitely go more in depth about my horror story with the sales taxes, but this is pretty much like a little mini walkthrough for the people who don't necessarily know how to set it up um for their llc. but you do want to make sure that you're filing them on time because they will charge you a 50 late fee- 52 late fee um if you do not file them on time. um, even if you have to pay zero dollars for the taxes, you're still gonna have to pay that fifty two dollars in order to be current um with your state. so make sure that you are doing that and if you don't, and you're not following the time. trust and believe me, they will come through their money. make sure you are ready to begin paying the moment you apply for

Do You Need A Business License To Sell On Shopify?

do you need a business license and a tax id number to sell on shopify? that's coming up. [Music]. what's up, guys, welcome back. we're back with another great video today, and if you're new here, i want to welcome you to our channel. my name is carrie, i'm an online entrepreneur, online business owner, and this channel is here to bring you the best strategy, secrets and hacks to grow your online business, and in today's video, we're diving into something that is toked about a lot in our community and i get asked this question a lot, and it's: do you need a tax id, an llc, a business license, when you're starting out on shopify, and do you need to charge taxes on shopify when you're just starting out? so let's dive in. the first thing i want to address today is the misconception that it's really really hard to become legal and actually, you know, get the necessary things for your business. in my experience, it's actually a lot easier than expected to get that tax id number, to get your business, you know, official and to be able to to accept sales tax and all that kind of stuff on your shopify store. in my state of oklahoma, you can get your tax id number back just like a day or two, and so it's just really really easy to get started. it doesn't cost a lot. it's usually 60- 80 bucks. you definitely want to check with your state and what is required in your state, but i know here in oklahoma i was surprised at how easy and quick the process was. that being said, the next question we need to address is: do you need to do this before you start selling on shopify? now i want to give this disclaimer that i'm not giving you any official legal advice. i'm just speaking from my own experience and starting multiple shopify stores and going to that process and being able to observe the process with my students, and that is my. my recommendation is that you don't need to get all of your business license and all tax id and all kind of stuff when you're just starting out, and i'm going to tell you exactly why. the reason why is because you don't want to go through the trouble of making your business legal and jumping through all the hoops that your state requires before you know if you're really going to follow through with selling on shopify, doing pronoun demand or e-commerce, whatever you're doing. a lot of people you know there's a statistik that you know- 80 or 85 percent of new businesses fail in the first 120 days. it's so easy to start a shopify store that, unfortunately, a lot of people just don't continue and they don't follow through. they kind of do it as just a hobby and they end up letting it go if it doesn't work out quickly or they just get bored with it or whatever the reason may be. so i don't recommend that you go through, pay the money, do the work, do all the filing to make your business legal before you know if you really have a product that you can sell or if you're going to be invested in it. you know come 30, 60, 90 days or longer. so, with that being said, next i want to tok about what will happen if you don't incorporate your business and you start selling on shopify. here's what. what kind of happens is when you start selling on shopify and if you're just making a few sales here and there, you're going to be fine and you can actually just claim that on your personal tax return. in my experience, you can claim that under your social security number- and i would recommend that you don't collect sales tax if you don't have your business incorporated- and what will actually happen is, once you hit a certain number of sales or you've had your business long enough, shopify will reach out to you and let you know that you need to go ahead and incorporate your business and make it official, and they will give you a time frame to do that before they will shut down your shopify store. so my recommendation is that you get out there, you start selling without going through all the legal process, start to see if this is something you're really going to follow through with and then, once you get that notike from shopify or you see that you're you are consistent, you are going to keep selling on shopify- then go ahead and make your business legal. i want to make sure you understand i'm not a legal professional and i'm not saying that you shouldn't make your business legal. you shouldn't incorporate your business. i'm simply telling you that in my experience and dealing with my own stores, multiple stores and hundreds of students- that when you're just starting out, i don't think it's worth your time or effort to do that before you find out if you're going to follow through, if it's going to be a successful idea, if you're going to have the products, all that kind of stuff, if you're going to have the sales. so that's my best recommendation for you. if you're enjoying this video today, you're learning something. hit that like button. it really helps us. with the youtube algorithm, we can reach more people. we can help more people if you just press the like button. also, make sure you subscribe to the channel. we put out new videos every single tuesday and every friday- tons of content, so make sure you subscribe so you don't miss a thing. the last thing i want to tok to you about is collecting sales tax on shopify. now i want to walk you through just the easiest way that i've found to do this now. first of all, inside your shopify store, when you go into the settings, you can simply turn on sales tax collection and shopify will automatikally calculate the sales tax for no matter what state you're, you're doing business in or what state you're selling in, shopify will automatikally calculate that for you and collect that upon selling an item. now, once you sell an item, that sales tax just becomes part of the sale and it goes into your bank account. so i highly recommend that you have that. you put that sales tax aside, because that is not part of your revenue. it's not part of your profit. you actually need to put that sale, you need actually to pay that sales tax to the state and you want to make sure that you're doing that. the easiest way that i have found to do that is an app called tax jar t-a-x-j-a-r. i'm not an affiliate for tax jar, but i've been using them for a number of years and tax jar will automatikally calculate your sales tax. it will integrate with your shopify store and in most states it will auto file your sales tax monthly for you. so if you are at the stage of your business where you you are official, you go, you have your your tax id, you have your sales tax permit and you're collecting sales tax inside shopify, you need to make sure that you're remitting that to the state monthly. and- and this i'm speaking in my experience from oklahoma, i don't know all of the the rules and regulations state by state- but you need to remit that sales tax monthly and the easiest way to do that is by autofiling with a app like tax jar. that's the one that i've used and i'm familiar with, and it's worked like a charm and made the process really, really simple. so, to wrap this whole thing up, if you are just starting out with shopify, i recommend that you don't go through the legal process. go ahead and start selling. see if it's something you're going to be consistent in. once you get notified from shopify that you need to go ahead and provide your tax id number, that's when i would recommend going to your state, going through the process to make your business legal so that you can continue selling. at that point you need to start collecting sales tax on each transaction and remitting that sales tax back to the state, and i recommend an app called tax jar to do that automatikally for you. so hopefully that was helpful today and you learned something. so if you're ready to get selling on shopify, if you're ready to set up your store, start selling today. i want to invite you to go to shirtschoolcom shopify and get a 14 day free trial of the shopify platform. in my opinion, shopify is the absolute best ecommerce platform and it really covers everything that you can need for your ecommerce business.