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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7220
Experience:  15years with H & R Block. Divisional leader, Instructor
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Hello, my question about sale tax. Id like to open distributive

Resolved Question:

Hello, my question about sale tax. I'd like to open distributive company, please explain how it works to pay sales taxes, especially if I'll sell the products overseas, for example to Ukraine, Russia, Israel.
Submitted: 11 months ago.
Category: Tax
Expert:  Robin D. replied 11 months ago.

Robin D :

Hello and thank you for using Just Answer,
The state listed on your info says Florida, if that is the state where you will be that is the state I will advise on. Each state looks at nexus a little diferently.

Robin D :
All sales of taxable tangible personal property made via the Internet are subject to tax when the merchandise is delivered to a customer located in Florida.


The selling dealer is required to register as a Florida dealer and collect sales tax from the customer at the time of sale when any of the following is true:



  • The dealer is a Florida business or resident.



  • The dealer has a physical location in Florida to sell or store merchandise or property.



  • The dealer has agents in Florida who solicit or transact business on behalf of the dealer.



  • The dealer delivers merchandise into Florida in vehicles that are owned or leased by the dealer.



  • The dealer owns land or buildings in Florida.


Customer:

I live in Florida, and I'd like to open business in Florida. I need to know before I'm going to this serious decision everything about paying taxes and, actually about all my expenses. As I told you, I'd like to sell merchandise to overseas--Ukraine, Russia, Israel

Robin D :

The sales made over the internet would not apply for Sales tax if delivered directly over seas or outside Florida.

Robin D :

Your nexus in Florida is determined by what your business is going to do in Florida.

Customer:

I plan to send the mercandise by mail--USPS, or UPS

Robin D :

If not delivered in Florida then there woudl not be sales tax to pay in Florida by the buyer.

Customer:

What kind of reports will I submit to IRS?

Robin D :

Here is a link to the Florida page on Doing Business in Florida and what taxes you may have
http://dor.myflorida.com/dor/businesses/

Robin D :

That will depend on what business entity you choodse.

Robin D :

choose* sorry

Robin D :

Each has its own requirements.

Robin D :

The most common is Sole proprietor

Robin D :

That means a Schedule C

Customer:

Please explain in more detail how it works, sorry, I'm new in this area. I bought the merchandise in internet for whole sales prices, sent them to Ukraine, they selling the products, I'm receiving profit. What should I submit to IRS?

Robin D :

You are going to be showing your income and expenses using a Schedule C when you file your tax return for the year.

Robin D :

On teh Schedule C you will list Gross income and then the expenses to then be taxed on your Net.

Robin D :

Are you a US citizen or resident alien?

Customer:

So, I do not have to send the sales taxes at all? Yes, I'm US sitizen

Robin D :

Not if your sales are overseas.

Robin D :

Sales tax is just state

Robin D :

Not fed

Robin D :

As a US citizen you will also have Self Employment tax on Net over $400

Robin D :

that does not mean you do not file if your net is under

Customer:

What is federal taxes and how to pay them?

Robin D :

You will still have regular tax too and must report

Robin D :

You will use form 1040 and Schedule C

Robin D :

Your fed tax will be income and possible Self Employment

Robin D :

You pay when you file

Customer:

If i'm full time employee, it will be ok?

Robin D :

Of course if you look like your income is exploding then you will want to make estimated payments so no penalty when you file the return

Robin D :

Full time for someone else or are you talking about your own business?

Customer:

No, I work for someone else, I just plan to open this business as additional income.

Robin D :

That is OK

Robin D :

You can still have the business

Robin D :

You will file as usual and just add the Schedule C'

Robin D :

Would you like a link to the Schedule C so you can see it

Customer:

Ok, What is Schedule C'?

Robin D :

Schedule C is the Form that Self Employed persons add to their US tax return.

Robin D :

To file your annual tax return, you will need to use Schedule C (PDF) or Schedule C-EZ (PDF) to report your income or loss from a business you operated or a profession you practiced as a sole proprietor. Schedule C Instructions (PDF) may be helpful in filling out this form.

Robin D :

Small businesses and statutory employees with expenses of $5,000 or less may be able to file Schedule C-EZ instead of Schedule C. The EZ means it is a shorter form.

Robin D :

You need to be keeping GOOD records of all your transactions.

Robin D :

If you use part of your home for business, you may be able to deduct expenses for the business use of your home.

Robin D :

There are many expenses that you may be allowed to claim to show less income.

Robin D :

The IRS Publication for Small business is best
http://www.irs.gov/publications/p334/index.html

Robin D :

Off hand I can already see possible home office, postage, and of course the cost for the items you sale.

Customer:

Thank you, XXXXX XXXXX helpful. Again, what kind of reports should i send every month, or every quarter to the IRS about federal taxes?

Robin D :

You need not send anything yet. Estimated tax is the method used to pay Social Security and Medicare taxes and income tax, because you do not have an employer withholding these taxes for you.

Robin D :

You must figure your net profit or net loss from your business. You do this by subtracting your business expenses from your business income. If your expenses are less than your income, the difference is net profit and becomes part of your income on page 1 of Form 1040. If your expenses are more than your income, the difference is a net loss.

Robin D :

Are you really making a lot of sales?

Robin D :

If not yet then you need not make estimated payments yet.

Customer:

I do not make sales at all yet, I'm just thinking about that, and i have people in these countries that want to have the merchandise from America. Please explain the sentence: "you need not make estimated payments yet"

Robin D :

Until you have income from this then you do not need to make estimated payments. Estimated payments cover you so you are not penalized when file your return and have not paid in enough tax during the year.

Robin D :

I hope our CHAT was helpful

Customer:

Yes, thank you very much, Robin

Robin D :

Your positive rating is always thanks enough.

Robin D :

Best wishes on your business.

Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 7220
Experience: 15years with H & R Block. Divisional leader, Instructor
Robin D. and other Tax Specialists are ready to help you

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