Thursday, January 26, 2012

taxes: the no-whining edition

I filed my state taxes last night. There was no whining. There was minimal confusion and delay. And they're not even due until next Tuesday.

Could it be that I have finally turned a new accounting leaf? Well, not entirely; my good intentions of downloading and categorizing all my PayPal records on a monthly basis didn't really happen. But I did enter all my wholesale and fiber show sales as they occurred last year, and that was a huge time savings.

Certainly it helped that I was doing this as a full-time, wage-earning business. Nothing motivates you to properly track income like needing to earn your daily bread.

I'm thinking a little more about buying QuickBooks. I find myself wanting to do sales data analysis that would be pretty cumbersome and time-intensive with my current spreadsheet setup. I've asked around and a lot of people think that it's too much program for a business at my scale. I also asked an accountant friend, who loves it. And QB integrates with the Washington Dept of Revenue's sales tax filing requirements (DOR has a database plug-in for QB). That alone might make it worthwhile, if QB has the capacity to tap into the state's GIS database; sorting out my in-state transactions and manually looking up location codes takes me quite a while. If I still have to manually look up the rate by street address, it won't really help, though.

Washington is one of the states participating in streamlined sales tax efforts. This is a multi-state attempt to collect sales tax from out-of-state businesses; so far, two-thirds have signed on, with 24 states that have already switched over to destination-based sales tax. States are losing a huge amount of revenue because of the growth of online sales, which has led in part to the dire financial straits that most of them are currently facing. Because Washington doesn't have an income tax, it's feeling a particular crunch from the decline in sales tax revenues. I have a lot of sympathy for the state budget people; many services that aren't mandated by federal or state law have been cut to the bone. People are getting kicked out of the state health insurance program (which has really stringent requirements; when I first moved to the state and was making $10/hour working part-time, I didn't qualify for any subsidies. But my experience with individual health insurance and my sheer outrage over premiums is a whole other story).

Anyway. The United States is moving towards collecting sales tax for all online sales. I had a horrible no good very bad six-month ordeal with the Illinois Dept of Revenue last year, rectified only after I fired off an email to the agency director (lesson reinforced, girls and boys: always go straight to the top), who to his credit, responded to my message at 7:30 p.m. on a Friday night and got it worked out for me in one business day. But if that experience was anything like what I can expect to endure after streamlined sales tax goes into effect, I might be rethinking how I sell yarn.

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