Sales Tax and Income Tax, what’s the difference?

Sales Tax and Income Tax, what’s the difference?

Quick cliff notes version: Sales Tax is what the buyer pays to the government when they purchase the item. This money is paid directly to you and you are responsible for collecting it from the customer, filing and remitting it to your state appropriately.

Income tax is the tax YOU owe on the net income of your business (income-expenses= net income). There are many factors on what your personal requirements are - whether you are paying quarterly deposits or not, whether you are a sole proprietor or SCorp.

The only sure way to know where you stand for taxes is to have solid financials. Don't let a large tax liability to sneak up on you - know how you are doing before December 31st.

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Lindsey Sryock