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Hello, anyone out there detest taking time away from serving their customers to figure out taxes. I am a contractor in AZ and they admittedly have one of the complicated tax codes it the nation for business'. I think they may even be a little proud of that fact. Is there an app out there that can help calculate deduction? One that maybe is integrated with tax codes and deductions. Sort of of a mini turbo tax. My business has to file monthly and it's completely ridiculous trying to figure this out every month.
 

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Sean
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Seriously? I mean it has been a few years since I lived there but it was pretty straight forward - maybe it is a Mesa thing? With that why are you doing it - find yourself a bookkeeper or CPA that can do it for you once a month. The hour or two you have to pay them a month is well worth it if you get audited. You may also wish to look into a program like QuickBooks

Billing customers is pretty straightforward - total x tax = amount they owe you (materials bought specifically for project are bought tax exempt because you collect from the customer)
All tax collected goes to Mesa / State minus the timekeeping deduction - if they catch you collecting tax & then not paying it all in because of an error or... they will nail you if it isn't returned to the customer or paid to them
 

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Don't charge sales tax!

Seriously? I mean it has been a few years since I lived there but it was pretty straight forward - maybe it is a Mesa thing? With that why are you doing it - find yourself a bookkeeper or CPA that can do it for you once a month. The hour or two you have to pay them a month is well worth it if you get audited. You may also wish to look into a program like QuickBooks

Billing customers is pretty straightforward - total x tax = amount they owe you (materials bought specifically for project are bought tax exempt because you collect from the customer)
All tax collected goes to Mesa / State minus the timekeeping deduction - if they catch you collecting tax & then not paying it all in because of an error or... they will nail you if it isn't returned to the customer or paid to them
In California, and if tax rules are the same on other states you don't have to charge your customers sales tax when you do every job on a contract basis. I haven't had a sales tax permit for 40 years.

Pay the tax at your supply house. When you do new construction you pay tax at the supply houses and you don't charge your customer a markup for sales tax. The same holds for all types of contracts. If you don't charge for the materials separately and you don't mark-up the materials separately you don't have to account for sales tax as long as you paid the tax at your supply house and as long as you don't charge Time And Materials.

Close your sales tax account, eliminate accounting for sales tax, pay the sales tax at your supply house and when you do any type job such as installing a toilet, faucet, roof, etc., you charge a contract price and write on your invoice: Install toilet, or whatever for CONTRACT AMOUNT of $150, $5,000 or whatever.

Check with your accountant, but be careful because many accountants may not understand what you are asking and may steer you in the wrong direction.

At the end of every year I get a few customers who want to know how much the materials cost so they can deduct their sales tax. I tell the customers that 25% to 40% of the contract amount is materials and I never hear from them again.

Accounting for sales tax can be a nightmare and it is better if you can eliminate the time, costs, audits, penalties, fines, and gray hairs.
 

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In California, and if tax rules are the same on other states you don't have to charge your customers sales tax when you do every job on a contract basis. I haven't had a sales tax permit for 40 years.

Pay the tax at your supply house. When you do new construction you pay tax at the supply houses and you don't charge your customer a markup for sales tax. The same holds for all types of contracts. If you don't charge for the materials separately and you don't mark-up the materials separately you don't have to account for sales tax as long as you paid the tax at your supply house and as long as you don't charge Time And Materials.

Close your sales tax account, eliminate accounting for sales tax, pay the sales tax at your supply house and when you do any type job such as installing a toilet, faucet, roof, etc., you charge a contract price and write on your invoice: Install toilet, or whatever for CONTRACT AMOUNT of $150, $5,000 or whatever.

Check with your accountant, but be careful because many accountants may not understand what you are asking and may steer you in the wrong direction.

At the end of every year I get a few customers who want to know how much the materials cost so they can deduct their sales tax. I tell the customers that 25% to 40% of the contract amount is materials and I never hear from them again.

Accounting for sales tax can be a nightmare and it is better if you can eliminate the time, costs, audits, penalties, fines, and gray hairs.
Sales tax is state specific. I can pays sales tax at the supplier on material for residential and new commercial and not itemize it on my invoice, but on commercial service or remodel I am required to charge tax on material and labor and submit it to the state.
 
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