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[Biztalk] Taxes - Sch C


#1

As long as we’re talking about taxes, there’s something I’ve always
wondered. What about the money you pay to the states in sales tax?
Do you figure it was never yours in the first place and subtract it
from the gross before you start, or do you include sales tax paid as
a miscellaneous deduction?

Janet Kofoed


#2

Janet -

You don’t account for this as revenue - you put it in a liability
account on the balance sheet when collected and remove it from that
account when you send it to the State.

Ivy S. Fasko
Contemporary Handcrafted Jewelry
http://www.ivysfasko.com


#3

Your choice of phrase here, “money you paid to the states in sales
tax” is more appropriately money you collected for the state in sales
tax. And you’re right it was never yours in the first place.

It’s just a small service we gladly provide.


#4

Janet,

As long as we're talking about taxes, there's something I've
always wondered. What about the money you pay to the states in
sales tax? Do you figure it was never yours in the first place and
subtract it from the gross before you start, or do you include
sales tax paid as a miscellaneous deduction? 

It was never your money. You are collecting it for the state. In my
state, NY, the state returns a very small percent to me as a fee for
collecting it.

Joel

Joel Schwalb
@Joel_Schwalb
www.schwalbstudio.com


#5

Hi Janet

What about the money you pay to the states in sales tax? Do you
figure it was never yours in the first place and subtract it from
the gross before you start, or do you include sales tax paid as a
miscellaneous deduction? 

Here is a link for the Schedule C instructions. the info you’re
looking for is in the instruction for line 23. You include the amount
collected for state sales taxes in your gross receipt number, then
deduct it on line 23 in your expenses section. I hope this helps.


#6
Your choice of phrase here, "money you paid to the states in sales
tax" is more appropriately money you collected for the state in
sales tax. And you're right it was never yours in the first place. 

Thanks so much for your responses! That was a topic I could never
find covered in anything from the IRS I read, or in the tax software
help files either.

Janet Kofoed