Ecommerce Internet Tax Accounting Firm in Chicago Illinois

Updated July 20, 2015
 
Ecommerce Internet Tax Accounting Firm in Chicago Illinois
Accounting for an e-commerce based business
 

This concept baffles most traditional accountants and CPAs. It also baffles most
clients, believe it or not. The clients think that because it’s on the internet
it should be easier. The opposite is actually true.

 

Why, one might inquire? The reasons are as follow:

     

  1. Credit cards, Pay Pal accounts, or whatever are used rather than cash or check. There is always a fee, hence a deductible expense and more accounting work.
  2.  

  3. Delivery. They’re not walking into a store and walking out with something, if we are talking about a tangible product. There is always a fee, and sometimes additional income. Hence additional accounting work.
  4.  

  5. Selling costs. Your generally going to sell these items from someone else’s site. They always charge a fee. Where there’s a fee there’s additional accounting work and a deduction.
  6.  

  7. Sales Tax. This has become a nightmare. If you are, let’s say an Illinois Retailer, and you are delivering a tangible product to an address inside the State of Illinois that is the end retail point, you are required to collect and remit Illinois Sales Tax. If you don’t collect sales tax, you better have a copy of the customer’s wholesale certificate.
  8.  

  9. Use Tax. If you are physically located inside the state of Illinois, and purchase something for use in the business form outside of the State of Illinois, you should probably not pay Illinois Sales tax on the item. But you are required to pay Illinois Use tax.

 

If you are asking this question in the first place then it is probably time for a change in accountants. Documentation and accounting for an e-commerce or internet business can be much more difficult than handling a traditional accounting client. The biggest mistake that you can make is trying to do your own accounting. Just because you have a copy of Quickbooks, and are computer savvy doesn’t mean that you know anything about taxation. Please don’t confuse the ability to reconcile a checkbook, with the ability to complete an income tax return that would survive an audit.

 
If you are having problems with your Ecommerce Internet Tax Accounting Firm in Chicago Illinois or have issues with your accounting in general, we would love to help. I enjoy hearing from my readers, and can be contacted at
 
Chris@AccountingSolutionsltd.com
 
Additional Accounting Articles and information on my firm can be found at
 
www.AccountingSolutionsLtd.com
 
Chris Amundson is the President of Accounting Solutions Ltd., a full service public accounting firm of Certified Public Accountants and Enrolled Agents handling the bookkeeping, accounting, tax preparation, and audit representation needs of Businesses, Estates, Trusts, and Upper Income Individuals.