The Ambitious Bookkeeper Podcast

191 | Setting up TaxJar for eCommerce Businesses

• Serena Shoup, CPA • Episode 191

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In today's bite-sized episode, we're diving into the nitty-gritty of setting up TaxJar for eCommerce businesses. Whether you're a bookkeeper with some eCommerce clients or an online seller yourself, stick around. Serena's got some super helpful insights coming your way, complete with screen sharing over on YouTube if you're up for it.

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Welcome back, ambitious bookkeepers. Today I'm going to be talking and showing you some sales tax stuff, so if you are doing any bookkeeping for e-commerce clients, or maybe you are an e-commerce business listening or Watching PS, if you're listening to this. You can also watch the video on YouTube. I highly recommend you pop on over to my YouTube channel right now so that you can see the rest of the episode because there's gonna be some screen sharing. I'm gonna be diving into some how to on using TaxJar for e-commerce businesses. So let's go. It's actually kind of tricky to record a podcast episode. Knowing that it's going to go on the podcast and YouTube. So I think from here on out, I'm just gonna start acting like I'm doing a video. And if you're listening to the podcast, it's just gonna feel a little weird to you. So I am, thank you for bearing with me in this weird transitionary period. Like I said, I'm trying to build my YouTube channel. A lot of the content I also wanna have on the podcast so people don't miss out on it. But some of it, like this episode is best viewed on YouTube. So if you're not watching over there yet, get on over there. Before I start screen sharing, I also want to address the white elephant in the room if you follow along on social media. I just moved and so I haven't really set up a background or anything for my office. I'm actually in the corner of my dining room and that's where my office is going to be. So welcome to my new office. Alright, let's dive into it. Today I'm going to be showing you how to use TaxJar and set it up for e-commerce businesses. A lot of people lately have been asking me sales tax questions in my groups for bookkeepers, and I also help quite a few clients. By managing their sales tax, in multiple states. And the way that we do that is by using text jar. I do wanna caveat though that if you are selling a lot of products and digital products internationally, like a lot, a lot, Tax Jar is not going to be the way to go. You're gonna wanna work with something like Avalara that handles. International VAT or vat. But most of my clients are US based and mostly just selling in the us. There is a little bit of sales that trickle out into international places, but they aren't hitting thresholds right now, so we are just kind of keeping an eye on it, and that's the approach that I take with most of my clients. we just keep an eye on things and then we address them when they become. Bigger to deal with and the client decides if they want to take on the burden of reporting and remitting that tax to the other countries, or if it would cost more than it would be worth, basically. And that's usually the stance they end up taking because it's so minimal. Alright, so as promised, I'm gonna do some screen sharing. I'm going to show you how to set up your tax jar for e-commerce. Alright, here we are on our TaxJar dashboard, and the first thing that you want to do is make sure your shopping carts are all connected to TaxJar. And you're going to do that by going to account and linked accounts for your data sources. And this is where you're going to click on all the shopping carts that you receive sales from Now. You don't necessarily want to connect. All of these, even if they're your payment processors. So let me back up a little bit. So for example, Shopify, you can actually collect PayPal through Shopify, but Shopify is your shopping cart, so that's the one that you want to connect. You don't wanna connect Shopify and PayPal 'cause it will duplicate the sales that are coming through. Same with Stripe. Stripe can be a payment processor for other shopping carts, but if you've already connected the shopping cart, you don't wanna connect Stripe. However, if you don't have a shopping cart like Shopify, or Square or something like that, and you are taking sales directly through Stripe and invoicing people, you will want to, link that. You can also upload CSVs or use the tax jar API, that's a more advanced methodology, and I suggest if you think that you need to use those, you should just work with a bookkeeper. Or if you are the bookkeeper, do a deep dive on learning those aspects of this program. Okay, so the first thing you're gonna do is. Connect your shopping carts. Once you've connected your shopping carts, you then want to make sure that all the sales history has fed in so that you can run a 12 months worth of history on The Nexus Tracker, and this is going to allow you to figure out where you have Nexus at, and Nexus is just a liability to collect and remit sales tax. What establishes Nexus? Well, it could be that you have an employee in that state. You have storage for some of your products in that state, or you could be based in that state. And lastly, this is what gets a lot of people freaked out and kind of confused, is you can hit the thresholds in certain states to then be required to collect and remit sales tax. There are some states that the threshold is a transaction volume or a dollar amount, and then there's some states that. Are just a dollar amount. If you sell a lot of products that are low dollar, but you sell high volume of them, you could end up establishing Nexus in. A state where you only have to remit like a few thousand dollars a year in sales tax, which is kind of a bummer and lots of states are trying to get that threshold, transaction volume taken away because that was not the original intent of those rules. Okay. first things first, connect the shopping carts. Get all that sales data into tax jar. So then number two, you can figure out where you may be liable to collect sales tax. If you are already registered in, say, your home state where you're located, then you definitely want to set up. Nexus in that state. So to do that, you go to State Nexus settings and you will click on ADD State with Nexus type in. The information that you have for your state. Say for example, I'm in Arizona, it's already connected, so I'm just gonna pretend I'm in Alaska and you should already know your filing frequency. This is going to show up on a notice that you received from that state when you set up your sales tax id. And if you don't have this information because you've lost it, you can call the state and find that out. So I'm just gonna put annual, that means you only file once per year, and then the name that you're registered as in that state, and then the ID that they assigned you, and the date that you established Nexus. So if it's the state where you're established into doing business, that Nexus is established on the day you opened your business, and this is the, one of the great things about tax jar is it knows the rules by state on whether shipping and handling is taxable. So it will default for you. And when you're all done with that, you can click submit. I'm not gonna click submit because this is, an existing TaxJar account and I don't want to mess around with any of that. So the next thing you're going to do, if you've established Nexus, you want TaxJar to file that for you. So you're going to enroll in AutoFile, so you can click on the state and go through the steps to enroll in AutoFile. And the last thing that you want to do is each quarter because there's varying filing frequencies. You want to reconcile this on the quarter end to make sure what you're collecting is what is being paid out, and those are all the steps for setting up your tax jar. If you are a bookkeeper or an accountant and you are looking to learn more about sales tax and dive into this more, I encourage you to head over to my sales tax workshop. The link is down below where you're watching or listening to this video or you can go to ambitious bookkeeper.com/sales tax. If you are a business owner and you have watched this YouTube video and you've realized that you need help with sales tax. You can hire me and my firm to handle it for you. Go ahead and click the interest form link below this video to get started.

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