Question 1: Mississippi Sales Tax?
I run a website design company in MS and I have a LLC. I just started making
sales this year of 2013 and I heard I did not have to charge sales tax unless
my product is tangible. People have told me a website and hosting a website a
non-tangible product. Am I exempt from charging sales tax to my clients?
If I do need to charge sales tax how much do I charge 7%?
How much will I have to pay back to the State all 7%?
When do I pay this money to the State? Monthly? Yearly?
What is the website I can use to make payments online?
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Question 2 Other Withholding Taxes on Income?
I only hold back 25% of each payment and keep in a savings account so I can
pay it back at when I do taxes at the end of the year of 2013.
Am I suppose to pay withholding taxes quarterly or wait to the end of the
year?
Someone told me they got charged interest for waiting till the end of the
year to pay taxes that they were holding in a savings account. I assume I
need to be holding back 25% on all of my business income but I just don't
know where and when I am suppose to pay this. Please help and thanks in
advanced for all your comments!
BizResearcher | Window Shopper |
3/6/2013 - 11:45 am
To answer your questions - first, if you only design, and possibly host,
websites, you do not have a product; you have a service business. Many states
don't tax services. You can find out if MS does by checking the website of
your state department of revenue or taxation. If MS taxes services, you will
need to obtain a sales tax permit. Then you will add whatever the state rate
is, presumably 7%, to each invoice. You will remit that money to the state
each quarter.
To answer your second question, your friend is probably talking about
estimated tax payments. (Withholding refers to money withheld from an
employee's income for taxes, Social Security and Medicare.) You need to pay
quarterly estimated tax on your earned income. You can find information about
that on the IRS website as well as a link to the forms you need to use to
remit the payments. If you owe taxes and do not have at least 90% of your tax
obligation paid in estimated tax or withheld by an employer, then you will be
charged a penalty.
To answer your questions - first, if you only design, and possibly host, websites, you do not have a product; you have a service business. Many states don't tax services. You can find out if MS does by checking the website of your state department of revenue or taxation. If MS taxes services, you will need to obtain a sales tax permit. Then you will add whatever the state rate is, presumably 7%, to each invoice. You will remit that money to the state each quarter.
To answer your second question, your friend is probably talking about estimated tax payments. (Withholding refers to money withheld from an employee's income for taxes, Social Security and Medicare.) You need to pay quarterly estimated tax on your earned income. You can find information about that on the IRS website as well as a link to the forms you need to use to remit the payments. If you owe taxes and do not have at least 90% of your tax obligation paid in estimated tax or withheld by an employer, then you will be charged a penalty.
Thank you very much for this information. I will try and research more and
see what I can find. Every time I call MS State Tax Commission they have a
recording that pretty much says we are not taking calls I guess due to high
calls from tax season. Your information is very helpful to me since I am new
to this LLC business and I thank you very much for taking the time to help
me.
JGabriel | Community Moderator | 3/7/2013 - 11:45 am
BizResearcher | Window Shopper | 3/6/2013 - 11:45 am
websites, you do not have a product; you have a service business. Many states
don't tax services. You can find out if MS does by checking the website of
your state department of revenue or taxation. If MS taxes services, you will
need to obtain a sales tax permit. Then you will add whatever the state rate
is, presumably 7%, to each invoice. You will remit that money to the state
each quarter.
To answer your second question, your friend is probably talking about
estimated tax payments. (Withholding refers to money withheld from an
employee's income for taxes, Social Security and Medicare.) You need to pay
quarterly estimated tax on your earned income. You can find information about
that on the IRS website as well as a link to the forms you need to use to
remit the payments. If you owe taxes and do not have at least 90% of your tax
obligation paid in estimated tax or withheld by an employer, then you will be
charged a penalty.
jrlund1006 | Window Shopper | 3/8/2013 - 12:33 am
see what I can find. Every time I call MS State Tax Commission they have a
recording that pretty much says we are not taking calls I guess due to high
calls from tax season. Your information is very helpful to me since I am new
to this LLC business and I thank you very much for taking the time to help
me.
Thanks!
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