If this is your first tax season as a Shopify or Amazon FBA seller, it may be a bit challenging for you to handle an IRS Audit. However, when you learn the basic things about managing it the right way, it becomes a less tedious affair. For all new and seasoned Amazon FBA and Shopify sellers, an IRS audit usually involves a list of tasks you have to accomplish for filing your return. The following steps will help you to get organized to file your tax return in the US:
Remember Tax Deadlines
Do not miss your tax deadlines. Doing so can result in costly penalties. Set reminders so the tax deadlines do not sneak up on you. Your taxes are due on April 17, 2017. You may have to submit additional documents before the due date to the IRS, which generally depends on the kind of business you have.
Organize All Receipts
To follow a paperless approach to organize all your receipts, you can store them online as this will save you from heaps of papers to sort through.
Update Your Bookkeeping
All bookkeeping must be up to date to file your taxes correctly. Updated and organized books offer a precise view of a business’s expenses and incomes. This will also come in handy if you need a line of defense during an audit. There is a wide range of online accounting software for processing bookkeeping. On the other hand, if you want to hire professional services, hire a local or online bookkeeper. Incorrect bookkeeping information can lead you to making risky and unintentional mistakes leading to a false claim to the IRS.
In case you paid more than $600 to an independent contractor during the tax year, you may already have sent a Form 1099 to the contractor by February 1. You also had to submit a copy by March 31 to the IRS.
Become Familiar with Sales Tax Requirements
Sales tax law can be quite complicated. In case you do not comprehend them, consult an accountant to explain to you how sales tax applies to your online business.
Do You Want To File For A Tax Extension?
Since a tax extension will not save you from paying taxes owed by the regular deadline, filing for a tax extension makes little sense, although it can be an easy way to get some extra time to file your tax return. You will be required to fill out the tax extension form according to the type of business you own and calculate the amount of taxes you owe. After completing the details, submit the amount you owe to the IRS via mail before or on April 15. The IRS will only contact you if your application is unaccepted.
Check Out for Tax Deductions
There are some deductions that are commonly available to online sellers, including home office deduction, education and internet costs. Sellers who use services, such as Google Voice or Skype, can deduct these as office expenses.