The year has officially begun, which means it’s time to start thinking about filing your sales tax returns. The vast majority of states – 39, including the District of Columbia – set their annual or semiannual filing deadlines in January. Whether your return is annual, semi-annual, quarterly or monthly, you will likely have to pay taxes soon.
Luckily, Shopify Tax can help save you time and make managing sales taxes a little less stressful! To help you get started, we’ve compiled a list of key January tips and deadlines below.
Please remember that it is your responsibility to consult your local tax authorities or a tax professional to verify that you are collecting the correct tax rates from your customers and to ensure that you are reporting and remitting your taxes correctly. Plus, most of the tax professionals we know are pretty nice people.
Refresh on where you currently collect taxes – or may soon need to – and communicate any changes.
Have you opened a new flagship store in New York? Did your recent marketing campaign lead to increased sales in Arizona? Milestones for your business can impact your tax collection requirements. You may hear the term Link used to describe when a business must register and begin collecting and remitting sales tax in a particular state. Nexus can be established by a physical presence such as a storefront or warehouse, or by an “economic” presence determined by exceeding a defined sales threshold. There’s no time like the present to make sure you’re on top of your tax requirements. If you use Shopify Tax, you can take advantage of sales tax insights to check where you’re currently collecting and get advice on other places you might owe today or in the near future.
Create a calendar of your upcoming tax filing deadlines and requirements
Your sales can impact when you start collecting taxes and how often you file. Most companies we speak with start with annual filing requirements and then move to quarterly or monthly filings as their business grows. If you are unsure, now is a great time to check with the state Department of Revenue.
Once you’ve determined your filing frequency, it’s a great time to familiarize yourself with the key deadlines. We’ve provided January due dates and helpful links below. When creating your plan for January, take some time to review and add any other key 2024 dates to your calendar. Your future self will thank you!
Compile your state-level reports
When it’s time to file, the state relies on your business’s sales and tax data to determine how much of the tax you collected should go to the state, as well as to each county , city or local jurisdiction. Compiling and reconciling all of this information can be time-consuming and frustrating, which is why Shopify Tax now includes enhanced sales tax reporting. Select the state and your filing frequency, and you will be taken to a jurisdictional breakdown of sales made and taxes collected. Use this information to complete your online or physical returns, or export and provide to your tax and accounting team.
Send your feedback!
You’ve done all the hard work; now file those returns! Most states recommend, and some even require, that you file your return online. You can find more details by visiting each state’s website.
Consider automatically setting aside sales tax in the future
Tax season is stressful enough without having to worry about whether you’ve set aside enough money to pay your taxes. To help you save funds for tax filing time, you can set aside U.S. sales tax on your Shopify Payments and Shop Pay Installments payments using Shopify Balance. Go to Balance, then enable Sales Tax Account under Settings to get started. Once activated, the tax you collected will be automatically allocated on your next Shopify Payments and Shop Pay Installments payment. You can withdraw funds from your dedicated Sales Tax Balance account at any time. This way, you will have the funds you need when it comes time to file your taxes.
Take the Stress Out of Sales Tax
Shopify Tax strives to make sales tax management as transparent as possible. Take the first step toward a less stressful year with insights, ultra-accurate tax calculations, improved reporting and more!