Tax due fee?

[esi7esi7]

Originally Posted by iCe

How does one do that (file once a year) when they require me to fill out a report quarterly?

Personally... I would just as soon have enough sales to warrant filing regularly rather than put a big round zero in all the blanks...

Call the Tax Office and tell them you would like to switch to yearly filing. It shouldn't be a problem. Less paperwork for them too.

[adirty1]

yeah file once a year and be done with it. call them up and they will help you get switched over.

[Aric C. Hoek]

OK I may be totally wrong about what I am getting ready to write, but I understand this to be correct. It your business is making less than 150K per year then you have the option pf paying your sales tax annually, or quarterly, or monthly. But once you surpass annual earnings of over 150k the State of Texas will require that you begin paying sales tax monthly. You will not get a choice. You get a nice little letter telling you so. The letter actually congratulates you on being so successful, and then notifies you that the quarter you are in now is the last quarter that you will be allowed to pay monthly.

Now… let me share a time in my life which there was much suffering. I had decided to test the limits of the state of Texas. Quite possibly one of the most stupid things I have ever done. We all have one of these stories… right? The stupidest thing I have ever done story?

I was using an American Express Gold Card to supplement my cash flow for my business.. Each month I would run up my bill and then pay it off. It was my financial crutch that created a vicious cycle that I wanted out of. I would run up my bill, pay it off in full each month, then only to find that the coffers were empty., so I would use my card again to get me through. I was even using my American Express to pay my sales tax as well as you can pay it online. Bad idea.

I decided to get rid of the card to get out of the cycle. Cold Turkey. So, I paid off the card and then didn’t use it. I cancelled my account. But once I paid it off, I was faced with my same old problem, I had no money because I had just made a payment. The money I was earning would go to my monthly bills, and monies due to sales tax went on the back burner.

Bad idea.

My payments became delinquent. Really bad idea. My business account was frozen! Very scary! I was in danger of losing my business!

Texas will take the figures you paid for the previous quarter and then predict that you will make the same amount the next quarter. You are then billed for that amount if you do not file in time. However, this quarter is not over yet so I am not sure what is going on unless the state has put you on month to month billing and you missed their special little letter.

Once your account is frozen, a lien is then automatically applied to your business as well. Lots of fun. On top of that your sales tax permit will be revoked.

I was not having a good month.

Here is one of many good things about being a digital wedding photographer. I was able to get out of the fix I was in somewhat easily because I have very little that I have to keep in stock to produce my product. If my business required a large surplus of materials to produce my product, and my account was frozen and I had no way to purchase the supplies needed to produce my product, then chances are I would have had to close my business. Does that make sense? Lucky for me that I have a system down that keeps the cash flow coming on in.

So, one thing that I did to help me keep track of what I was going to owe in the future for sales tax was to open an additional business account just for my sales tax. With every sale that I make, 10% goes into this account. That way I know that I can cover the 8.5 % in sales tax.

Why am I writing all of this? The entire incident for me is really rather embarrassing. I only hope that my mistake can help you... and others. If I were in your shoes, I would not mess with the state. I would pay the tax and then seek a refund or have the payment applied as a prepayment towards your next sales tax payment due.

Just my two cents.. which will go to the state.

P.S. I am glad that I got out of the rut I was in with my credit card. My business is stronger for the decesion.

P.P.S Hey! this is my 200th post!