This post will help you determine if it’s time to stop filing sales tax returns yourself and avail yourself to sales tax software.
When you have a brand new online business, taking care of all the administrative hassles like bookkeeping and filing sales tax returns can be almost fun. You’re learning the ropes of your business and making things official. But after a while, what was at first fun becomes a total chore. To make matters worse, the more sales you make and the more you grow your online business, the more complicated your sales tax life becomes.
How to determine if you need to automate your sales tax:
- You’re spending too much time reporting and filing sales tax
As a business owner, only you can choose how you spend your time. Will you spend time on profitable tasks like sourcing new products or meeting with new vendors? Or unprofitable tasks like compiling sales tax data and filing a sales tax return?
Sales tax can be fairly simple if you sell on one channel or only have sales tax nexus in one state. But as your business expands, so does the time and headache it takes to file your sales tax returns. Why pay the CEO of your company – yourself – to do something that you can easily automate?
- You’re not a data entry master
In the early days of TaxJar we talked to sellers who built complicated spreadsheets to take care of their sales tax filing. Of course, if they entered one number incorrectly or a single tax rate changed, the whole spreadsheet was useless until they pored over the formulas to find the problem.
Also, when its time to file a sales tax return, you are required to enter how much sales tax you collected from each state, city, county and other special taxing district. On top of that, many states require that you round the numbers up or down. One small mistake or transposed number will result in an error as you click “submit” on your return. And then you have to go over all the numbers again. If this sounds like too much work, its time to use a sales tax automation software.
- You’re a tardy tax filer
As an online seller, you could have multiple sales tax due dates. You may be required to file monthly on the 20th in one state, quarterly on the last day of the month in another state, and annually on the 15th of the month in yet another state. With so many different state sales tax due dates, it’s easy to mix them up or simply forget to file.
Unfortunately, states are not very forgiving, and if you forget to file they’ll charge you both a set penalty and interest on the amount you paid late. It’s not worth paying a penalty for forgetting to file a sales tax return. If this sounds like you, it may be time to check out sales tax automation.
- You’re anything but a math whiz
Sales tax returns can get a little math-heavy. First there’s the rounding that I already mentioned. And some states also allow you to take a sales tax discount. While this is generally only 1-2% of the sales tax you collected over the taxable period, it’s free money. If math was your worst subject, you may want to turn your sales tax life over to sales tax automation software.
- You simply never want to look at another sales tax filing again
Wait, what? Do you mean you didn’t strike out on your own and start your own business just so you could file sales tax every few months?
Of course you didn’t! If you’re sick of sales tax, never want to remember another password, fill out interminable web forms or dig up your bank account and routing number ever again, then it may be time to automate sales tax!
TaxJar is a service that makes sales tax reporting and filing simple for more than 8,000 online sellers. Try a 30-day-free trial of TaxJar today and eliminate sales tax compliance headaches from your life!