vn2009
Posts: 263
Location: duluth mn, United States
Registered: 24 Sep 2009
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its tax time in the US
Posted: 16 Mar 2010 at 18:56 GMT
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wondering how most of you handle this. do we provide a service or a product? I did not recieve 1099's from all businesses i created tours for. 1 of them gave me a sales tax exempt form which would mean they concider this a product not a service. if we provide a product then there would be no reason to take social security taxes and such.
anyone know the correct way to concider what we provide reguarding taxes in the USA?
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Terry Montague
Posts: 339
Location: Boise Idaho, United States
Registered: 31 Oct 2008
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Re: its tax time in the US
Posted: 16 Mar 2010 at 19:58 GMT
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I provide both. Depends on what you are providing.
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Doug Aurand
Posts: 3282
Location: Albuquerque, NM, United States
Registered: 2 Jan 2008
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Re: its tax time in the US
Posted: 16 Mar 2010 at 20:11 GMT
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vn2009
You're getting income tax mixed up with sales tax
A tax exempt certificate, exempts the buyer from Sales Tax. It can be used for Services or Products in most states.
A 1099 is about Income Tax
Doug Aurand
Albuquerque, NM
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vn2009
Posts: 263
Location: duluth mn, United States
Registered: 24 Sep 2009
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Re: its tax time in the US
Posted: 16 Mar 2010 at 20:58 GMT
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do you guys charge sales tax for the tours you provide? im a technician this tax stuff is confusing to me.
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iam360Texas
Posts: 288
Location: Fort Worth, Texas, United States
Registered: 12 Jul 2006
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Re: its tax time in the US
Posted: 16 Mar 2010 at 22:05 GMT
updated: 16 Mar 2010 at 22:18 GMT
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We are a registered company with the State of Texas. We have an account set up with the Texas State Comptroller for the sole purpose of collecting an forwarding State Sales Tax.
Having said that... we have a Texas State Sales and Use Tax License document.
When we purchase order for imagine services.. we add on a Sales Tax percentage value to the total imaging sales value to arrive at a TOTAL SALES amount. Sales tax is a cost of doing business.
Texas does not have a State Income Tax. So Federal Tax has Schedule C... for which you can add the total Sales Tax as a DEDUCTION. Sales Tax is just a pass through amount to the State Comptroller. YOU have to add Sales Tax to your point of SALES vale.
Your clients 1099 is only needed if your purchase order is valued over $599. Service or product makes no difference. On your Federal Income Tax.. if you get a 1099 then declare it as 1099 income. If you do not get a 1099.. then declare the income as "Other income". Either way your earnings have to be declared on your State and Federal income Tax.
In Texas, if your client is a Church, tax exempt agency or government agency they usually can provide their Sales TAX and USE number. The way it works with tax exempt folks is that you work for them... either you collect Sales tax.. or they MUST provide their Sale and Use Tax for your records and THEY must collect to Sales and Use Tax when they sell the imaging products on to their client. Sales and USE Tax in Texas is only collected 1 time. You collect the Tax.. or your client collects the Tax on the sale of the overall product to their client.
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iam360Texas
Posts: 288
Location: Fort Worth, Texas, United States
Registered: 12 Jul 2006
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Re: its tax time in the US
Posted: 17 Mar 2010 at 12:51 GMT
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You get a tax exemption certificate showing your clients STATE SALES and USE TAX Account number IF your client is going to sell +sales tax your product on to their client. The END user is the one who pays sales tax.
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vn2009
Posts: 263
Location: duluth mn, United States
Registered: 24 Sep 2009
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Re: its tax time in the US
Posted: 17 Mar 2010 at 13:16 GMT
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that helps alot thank you.
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