my husband owns his own business his is the only employee ..and now pays a sales tax quarterly depending on his weekly/month income...are you allowed to claim the total amount of sales taxes paid in at the end of the year on your income tax?
2007-03-01 06:50:36 · 7 answers · asked by bluepolisheyes007 1 in Business & Finance ➔ Taxes ➔ United States
yes you can. there is a place for that when you itemize deductions.
2007-03-01 06:57:53 · answer #1 · answered by Jack Chedeville 6 · 0⤊ 4⤋
The sales taxes he collects and renders through his business have no tax consequences to the business or his individual tax return. He is only acting as a collecting agent for the state in this regard. Some businesses add the sales taxes received to gross receipts and then take an adjustment for the sales tax payments to the state but it's still a wash either way.
He is NOT paying sales taxes on his income. It's only based upon the taxable sales that he makes. He collects the tax from his customers and pays it directly to the State.
Do NOT confuse the sales tax rendering with actual sales taxes paid on business purchases. If he buys something for the business that will be consumed in the business or is a capital investment, he must pay sales tax on those items and he can deduct those sales taxes on the Schedule C as a business expense.
Personal sales taxes are deductible on Schedule A if you itemize and do not claim the deduction for state income taxes paid.
2007-03-01 07:20:11 · answer #2 · answered by Bostonian In MO 7 · 2⤊ 0⤋
I am confused. You pay sales tax when you buy things. If you have a business selling things, you may collect it and then send it to the state, maybe quarterly. If so, it was never your money, you just passed it along, and it depends on sales, not on income.
If you are self-employed, you should be paying estimated income taxes quarterly and apply them to your tax due when you file annually. Estimated income taxes are equivalent in that way to the federal income tax withholding on an employee's W-2.
2007-03-01 07:00:48 · answer #3 · answered by CarVolunteer 6 · 0⤊ 0⤋
No.
The sales tax that is collected from customers is a pass through item that never really belongs to him.
Technically, you can claim a deduction for sales taxes remitted but only if they also included in the gross income. This would give you the exact same answer if you didn't include them at all.
2007-03-01 06:58:30 · answer #4 · answered by Wayne Z 7 · 3⤊ 0⤋
Your gross receipts or sales from a business are reported exclusive of sales tax. Since the sales tax isn't reported as income in the first place, you can't turn around and deduct it.
2007-03-01 09:14:54 · answer #5 · answered by Judy 7 · 0⤊ 0⤋
Sales tax and income tax are separate. Your customers pay the sales tax. So that you send it to the government. Income tax is based on the money that you have made.
2007-03-01 06:58:09 · answer #6 · answered by Anonymous · 2⤊ 0⤋
I assume that you mean the sales tax he charges his customers for the products he sells - it's a zero transaction because he gets the sales tax from the customer (income) and pays the taxing authority (expense).
Are you sure about your terms?
2007-03-01 08:02:06 · answer #7 · answered by ? 4 · 0⤊ 0⤋