Vent: My old way of handling sales tax almost got me in big trouble

For the first two years my shop was open, I just saved 8.25% of every sale in a separate account and filed quarterly. Last month, a state auditor came in for a random check and showed me I'd been calculating it wrong on mixed items and services. I owed over $1,200 in back taxes and penalties. Now I use a dedicated software that syncs with my point-of-sale system. It cost me $35 a month, but it's automated and keeps everything straight. Has anyone else in Amarillo had a surprise audit and found a better system?

2 comments

2 Comments

troy_palmer7614d ago

That software sounds like a total waste of money. Manually setting aside the tax cash is the only way to really know where your money is. Software can glitch and then you're really in trouble, trusting some black box with the state's money. A lot of those point of sale links have extra fees on top of the monthly cost too. The old way builds discipline, you just gotta read the tax rules closer next time.

dylanh9714d ago

Man, I used to be right there with you on the manual method. Thought it kept me sharp and in control. Then I got a job installing floors for a small hardware store that got audited. Watching the owner try to explain his handwritten ledger for taxable supplies versus non-taxable labor was brutal. The rules on what's a material and what's a service are way too easy to mess up on a bad day. That $35 a month is cheap insurance to not have that headache.