How To Actually File & Pay California Sales Tax (walkthrough)

California sales tax so fun I had to suffer through this whole process and learn how to do it so I'm going to teach you what I learned so you don't have to suffer like I did Fair cool in this video I'm going to teach you everything I know about California sales tax how to do your filings how to pay it what to look out for understanding economic nexuses Etc so let's get started I'm going to be using two websites here on the left you'll see the cdtfa California Department of tax and fee Administration on the right you're going to see tax jar tax jar is how I record all of my transactions and pull them out of Shopify so they're organized and unable to do this if you just have a Shopify list you can get this done txar is not mandatory for this if you need a few recommendations of places or people to use check the description otherwise I'm going to teach you how to do this on your own so let's get started the first thing we have to do is log in to the cdtfa if you haven't already registered for a California reseller permit you need to do that and you can do that here but I've already done that so I'm going to hit log in that's what the reseller permit is all about by the way it's registering so that you can pay and file your sales tax in California now California collects sales tax on a yearly basis we don't have to submit and file our sales tax returns monthly like almost every other state California does it on a fiscal yearly basis from July to July this is my dashboard we are going to click on sales and use tax right down here and then we are going to file our return for the 30th of June 2023 you can see the filing date is the 31st of July so if you file later than that date you're going to owe late fees so make sure you file your sales tax for California every July just put it on your calendar just do that all right so let's click on this one right here you'll see that we have a couple options but there's a big red question mark right here so we're just going to ahead and click that and file a return for the 30th of June 2023 now it says the 30th June but it means for the whole year this this is where we start filling in our information but in order to fill in the information we need to get the information from somewhere so unless you have a bookkeeper or someone who can go into your store and pull all of your transactions out I highly recommend using a service like tax jar I'll leave a link below if you want to try them now we need to log in tax jar so I can show you what I'm talking about these are the states I'm autof filing in because I have an economic Nexus there but we're going to focus on California for now few things to know before we get started sales tax is handled a little bit differently with each state for example we talked about California it was every year you file but for other states you might have to file monthly and that means you need to submit transaction data for the county and or the city or unincorporated areas of that state every single month that's a pain in the butt it really is that's why we use software and professionals to help us out because this activity of paying our taxes it can't really be leveraged into a revenue generating activity there's no opport opportunity here it's just basic compliance stuff and compliance stuff can be a pain and you want to get through compliance stuff as quickly as possible because it doesn't have a benefit for your business that said tax jar has pulled all of the data from my Shopify store into this nice neat little report I set the filing period on annual because that's how we're set up in the cdtfa if I want a closer look which I do I will click on my schedule B right here and this will show you all of the different counties how much you did in sales in that county how much is subject to sales tax and what the taxes due are for each County specifically if you want a district breakdown you can do that as well I'm going to stick with the county breakdown we're just going to go in order here 1 2 3 4 5 you see what I'm saying there's Little Numbers associated with it now most of you watching this video are probably in California but if you're not it's because you've triggered an economic Nexus in California and you need to pay a sales tax because of that what's an economic Nexus an economic Nexus is a place where you've triggered sales tax you can see here that I've just recently triggered economic nexuses in Georgia Illinois Michigan North Carolina Ohio and soon to be Minnesota but what does that mean these states want sales tax from me because I've either reached $100,000 in total sales for the year or more than 200 total sales for the year if you meet any one of these criteria you have to go register in that state and you have to begin paying them what they are owed every single month this is why we like to use professionals that are as affordable as possible because compliance is a pain in the butt sometimes that's how economic nexuses work if you trigger an economic Nexus make sure you are collecting sales tax from your customers on Shopify so that you have enough money to pay for the taxes otherwise it's going to come right out of your pocket and that's not cool for the accounting nerds out there any sales tax you collect goes on your balance sheet as a liability that needs to be paid at the end of the year it's not actual Topline Revenue so if you can split that out highly recommend it let's get back to California now that we've talked about economic Nexus all right let's get started the first line here total sales is your gross sales that's the number that you'll want to put in you don't want to put in the total subject to sales tax we're going to do that later the purchases subject to use tax we're going to ignore cuz that's not me and then any sales of business assets we're not going to include either this is straight eCommerce let's hit next this is any sales made out of Fairground we're going to leave that at zero and go to next if you were looking at tax jar this is Marketplace sales right here in this section you're going to include any deductions or non-t taxable sales so if you look closely here we have 1,032 from shipping and then we have 168 from returned and then 108 form presumed exempt so we're going to input those three Fields right here that they don't fit the top category so we're going to do other non- taxable sales right here so the first is going to be shipping and description shipping costs and the non-t taxable amount is going to be $1,320 the next one we're going to hit other we're going to type in returns and we are going to look at our deductions and is 168 perfect another one we're going to do other this one's going to be presumed exempt if you don't have tax jar just leave this section blank and move on to the next one 1,38 okay now it all matches let's go down here we'll see here that we have $5,950 that needs to be reported below which I will show you how to do but what's important is you need to account for the transactions that happened in the unincorporated areas that means any place in California that is not a city and for that you just need to pay the flat base rate of 7.25% so the answer is yes and we put it right here and then we scroll to the bottom and we put in this number $2,516 which is this one right here not subject to District tax District tax is the city everything is subject to state tax but only certain transactions done in the state have an additional tax basis on top of them so you'll see right here that this is the rate so you're like whoa half of a percent or five yeah whoa half a percent like that's crazy only half a percent no it's a half a percent on top of the 7.25 so this is the tax rate that they're charging on top of the tax rate that is just the base rate for the state now what you'll do is you'll go ahead and you'll input everything and I'll show you how to do all of this and so we need to look at our district tax Breakdown schedule a and and we need to begin filling in the information into each one of these the taxable amount is the important one if you haven't already filled it out you need to do so here by creating a new drop down choosing like Alam County for example and then which one in here is it 966 you can see it's turning red because it's already here it's right here so we don't need to add this new one we can simply get rid of it it will go away and now we can adjust this one so we're looking at Alam County taxable amount Alam County this one 966 not 971 is $376 right here copy tracking so we're just going to go ahead and fill it out and leave the duplicates and type everything to make things easy so we don't have to search this will make it a little bit faster instead of searching for it so what you want to do is add the county and then click on on the box next to it and do the city and then we're going to click on that and it will tell you whether it's duplicate or not if it's not great if it is that's okay we'll just delete the duplicate with zero on it it's really reported so there's $62 here that is over and I cannot figure out for the life of me where this extra $62 is coming from so I'm going to subtract it from the richest one and uh we're going to make it we're going to figure this out all right Orange County you got plenty we're going to go ahead and subtract 62 and we're going to make this 10 hey look at that at zero we fixed it okay so really the math just needs to be dialed in here so let's go ahead and hit next fantastic so I'm just going to go ahead hit next and pay it so here's the tax due $136 you hit next you put in your first name your last name your phone number the title which is I'll put CEO today that's how I'm feeling am I a paid prepare or no and I'm going to hit submit this means that our filing is complete filing and paying are very different things you must file you must pay separately so I'm going to go ahead here and click on make a payment and I'm going to make a payment using the sales tax money that I have set aside from my business accounts now when you're making a payment you can pay with a credit card for a 2.3% fee or you can pay now with checkings or savings I always pay with the checking or savings I have it set up for the sales tax account already in my bank account and so what I'll do is I'll make a return payment I'll do the payment date the whole balance payment amount confirm the payment amount 1306 and then I will hit submit now if you need to add a new bank account or a new way to pay just kick the new button here but I already have mine set up through firefighters firsts Credit Union I'm just going to go ahead and make the payment and hit submit you put in your password boom and now you're done let's view the printable PDF save this and then I'm going to drop that over to my bookkeeper and we're done and that is how you file and pay your California sales tax while understanding nexuses and the implications that affect you I hope that was helpful I really like teaching this type of stuff and if you're interested in learning from me and you like my style I highly recommend checking out my accelerator I teach people how to master their business setup all day long and I absolutely love it or you can check out this video next because I think it will be just as helpful as this one

Channel: Vanader

Views: 5,671

Keywords: vanader, vanader growth, vander, vanadergrowth, evan van auken, evan auken, evan vander, evan vanader, vandergrowth, vander growth, vanader grwoth, vander grwoth, van auken, evan vanauken, vanader van auken, vanadr, vandr, entrepreneur, business building, how to, how do i, be good to future you, be good to furture you, begoodtofutureyou, LLC, S-Corp, s corp, incorporate, inc, scorp, lc, how to llc, how-to, business school, businenes school, businessschool, how to build a business, growth

Id: w22BYa74i5Q

Length: 13min 9sec (789 seconds)

Published: Sat Oct 21 2023