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  #1  
Old 05-11-2004, 10:33 PM
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1MajorTom 1MajorTom is online now
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Dumb sales tax question....

Ok here's my example.
In the state of PA, we collect 6% sales tax. I send it in to them every month before the 20th.
Here's an example using basic figures.
Say for the month of April we make $10,000.00. I will send in the $600.00 by May 20th. But by the time the sales tax is due, we have actually only received $5000.00 in payments. That would be $300.00 actually collected/received in sales tax.
Is it wrong that I am sending in the full amount even though we haven't gotten all the payments in? How is everyone else doing it? I never gave it any thought until now.
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Old 05-11-2004, 10:46 PM
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JFGLN JFGLN is online now
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It depends on your accounting system. You can count the money when you actually recieve it or when you make the invoices or statements( cash vs accural). You have to be consistent and stick with one method.
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Old 05-11-2004, 10:49 PM
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1MajorTom 1MajorTom is online now
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Yes for 6 years I have always done it the same way. I've sent the whole total in even if we didn't actually have it all collected yet.
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Old 05-12-2004, 12:44 AM
specialtylc specialtylc is offline
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Its taxes on your sales, not what you have been paid. So you have to pay it monthly in Pa. ? Here we pay it quarterly. I send in the full amount before I have recieved all customer payments.
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  #5  
Old 05-12-2004, 07:18 AM
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1MajorTom 1MajorTom is online now
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Quote:
Originally posted by specialtylc
So you have to pay it monthly in Pa. ? Here we pay it quarterly.
In PA, it depends upon how much money you are making. In the 3rd quarter they check to see how much sales tax you are collecting. If it reaches a certain amount, they bump you up to monthly. Which totally sucks.
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  #6  
Old 05-12-2004, 11:38 AM
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JFGLN JFGLN is online now
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I wouldn't consider it a sale untill I actually receive a check. This is called cash accounting. I have the Quickbooks sales tax payable account set up so it doesn't count the payments untill I receive the money. There is another form of accounting called accural-where you count sales as income at the time of the sale, before you receive payment. It doesn't matter which system you use as long as you are consistant. The federal taxes work the same way. How do you account for work preformed in December but you don't receive the money untill sometime in January?
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Old 05-12-2004, 05:44 PM
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1MajorTom 1MajorTom is online now
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Quote:
Originally posted by JFGLN
How do you account for work preformed in December but you don't receive the money untill sometime in January?
We don't work in December.
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  #8  
Old 05-12-2004, 06:15 PM
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Team Gopher Team Gopher is offline
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Hi 1MajorTom,

Here is a quote from this site that may be helpful.

"Sales Tax Payment Basis

There are two ways to remit sales tax to the taxing authorities:

∑ Accrual-basis method Means the tax is due when the customer is charged (the invoice date).

∑ Cash-basis method Means the tax is due when the customer pays.

Check with your accountant (and the taxing authority law) to determine the method you need to select. "
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  #9  
Old 05-22-2004, 12:35 AM
little green guy little green guy is offline
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I do it cash basis, so I pay on what I have recieved and pay monthly.
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  #10  
Old 05-22-2004, 10:33 PM
LwnmwrMan22 LwnmwrMan22 is offline
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In Minnesota you don't pay the tax for say.. April, until May 20th.

I invoice at the first of the month, ie April 1st, for the work that's going to be performed in April, so when it takes 30-40 days, I've got my money by May 1-10, and therefore have the money to pay the state.
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