People hire business bookkeeping services because they don’t want to tangle with the IRS, but that’s not the only entity that’ll hit you if you mess up on your business accounting. State and local tax authorities will also come after you with guns blazing—although fortunately, not literally—if you happen to make unfortunate “boo-boos.” One of the most commonly made is the improper reporting of sales tax, which can earn you fines and penalties. Here are a few tips to help you avoid making that grievous transgression and to prevent having to deal with the wrath of your local governments.
• Know the sales tax reporting requirements inside and out for your location. The fact is, if you do business with customers in your home state, you’ll have to collect sales tax—in many instances, additional taxes are also levied by cities and counties.
• Keep all of your sales records up to date and accurate. If you have difficulty doing this, you’re going to run into difficulty staying away from costly penalties.
• Ensure you have a solid understanding of the rules involving the collection and reporting of sales tax. If you don’t have that foundation or you’re a bit shaky on it, you need to address this knowledge gap immediately. When it comes to issues of tax, the government doesn’t treat amateurs and beginners with kid gloves.
For many who are busy with the daily operations of their business, having to deal with issues of state sales tax can be a bit overwhelming. If this describes the circumstance that you’re existing in on a daily basis, think about hiring professional bookkeeping services to handle these duties for you. Considering that the money you put in to have someone else balance your books will be preventing you from having to fork over sometimes extortionate penalties, paying for the services of a business bookkeeping service should pay for itself in no time.