It's really nice you share this kind of stuff. Most people online do not want to share their knowledge on these types of matters since they are not tax consultants. However, what you shared really isn't something complicated or super involved. I was a math minor but I am having a little bit of a hard time understanding this LOL. So, you need to calculate the taxes from your profit, but $375 isn't technically your profit. You have to subtract out the taxes from $375 in order for you to know what you actually made and what actually goes to the government. Dividing by 1.0875 gives you your profit... which was 344.83. The remaining left over ($30.17) was your taxes. So, thinking about it another way... I don't know how many candles you sold but I'm going to assume you sold 15. That would mean you charged $22.99 per candle (344.83/15=22.99). But you need to collect taxes from your customer, so multiply $22.99 x 1.0875 = $25.00. $25 is what you would have collected from the customer at the counter. $22.99 is what you keep and $2.01 is what you give to the government. And, just to make sure the math works out... $25.00 x 15 = $375 And the total taxes you would give to the government is $2.01 x 15 = $30.15. Off by 2 cents but I believe this can be explained due to rounding error which both you and I did. Ok, I think I finally understand it all now!
I love when you share formula how to videos, thank you very much! I definitely understand it and I always put a screen shot of the formula in my candle making binders incase I ever forget. Thank you so much for sharing your wisdom 🫶 you are greatly appreciated Erica!
This made a lot of sense to me. You did a great job of breaking it down, and the comparison to a candle making formula was very helpful too. Thank you for sharing your knowledge and experiences on these types of things that are often overlooked when talking about running a business. Love it!
This was very help. Becaus I was doing it the same way initially but now I’m gonna switch up. Thank you. You are a big help all the time more than you know!!!
When comparing to the candle formula it made sooo much for sense that way! I was able to catch on quick! I have to say you do a great job explaining things especially when it comes to numbers! I also was never good at math and still hate it to this day but your break downs really click for me and I really appreciate you taking the time to show us! 😊 I get excited now when it comes to calculating I’m like yes, I got this! Lol
You're starting with 100% of your sales plus the 8.75% taxes on those sales, so your starting amount is 108.75% of sales (or 1.0875 times sales). That's why you divide by 1.0875 to get your actual sales figure. Then, once you have your total sales amount, you know the rest was taxes.
@@MemoryBoxCandleCo You're most welcome! I love your vids, and your math was perfect - I just thought knowing "where that 1 comes from" might help if anyone's struggling with why the math works out. :) It's easy to get confused when you're working backwards from a total. lol.
@@MemoryBoxCandleCo thank you🫶🏽 right now I’m struggling a little on setting up my website (I’m also selling candles) and was wondering if you can maybe make a video on the back end of creating an online shop. Or if you have a video already, I would love to watch ✨
thanks for the video, very helpful. Do you consider Shopify to be accurate on their sales tax collection? I've used their reports and didn't question it when I remitted my sales tax. I've also used Shopify's POS system on my iPhone and ran the sales tax report and it looked accurate. Anyhow, just wondered what your thoughts were on that. Thanks!
A few questions, do you only include sales tax in the price at markets? If you do charge sales tax separately on your website, do you only pull the sales from your CA customers at the end of the year? And if you do include it in the price online, how do you not charge the non CA customers sales tax? Hopefully my questions made sense....thanks for all of your content ❤
Sales tax is only included in the price at markets, if anyone from California purchases from me online they will be charged additional sales tax based on their purchase price at checkout. There is a sales tax report page on Shopify where I am able to gather that information :)
Hello, quick question. I started a candle business last year and I wanted to know if you registered your business in every state for out-of-state buyers. Or are you charging the out-of-state buyers your sales tax rate?
Hi Erica, I have a question about taxes for single member LLC’s. Do you file your taxes on a 1040 and on form 568? This stuff is so hard to understand for myself 😢
I’m so sorry I can’t help with that because my CPA files everything for me :/ also I’m incorporated so I think it works a little different. Highly recommend you get with a CPA to make sure you’re filing correctly!
Most of my local customers don’t mind the extra charges when they know it’s being shipped to them, and a few of them have asked to meet up to do cash or venmo transactions. I haven’t had anyone complain!
Interesting. I haven’t had issues with customers not wanting to pay tax. I think it shows you are a professional business and I would worry in a audit they (the state) want you pay sales tax on you stated sales price in which you forgot to collect tax (but you still will owe the state). I’m sure I’m probably not right about being to back out the tax after the sale, but seems like a lot of work to collect less money. Just my opinion.
Your work is very beneficial, and you are amazing at what you do. Please don't stop teaching; we learned a lot from you in so many ways.❤
Very helpful breakdown! You Can feel the passion, go girl!
Haha I definitely let the passion slip out sometimes on certain topics 😅
It's really nice you share this kind of stuff. Most people online do not want to share their knowledge on these types of matters since they are not tax consultants. However, what you shared really isn't something complicated or super involved.
I was a math minor but I am having a little bit of a hard time understanding this LOL. So, you need to calculate the taxes from your profit, but $375 isn't technically your profit. You have to subtract out the taxes from $375 in order for you to know what you actually made and what actually goes to the government. Dividing by 1.0875 gives you your profit... which was 344.83. The remaining left over ($30.17) was your taxes.
So, thinking about it another way... I don't know how many candles you sold but I'm going to assume you sold 15. That would mean you charged $22.99 per candle (344.83/15=22.99). But you need to collect taxes from your customer, so multiply $22.99 x 1.0875 = $25.00.
$25 is what you would have collected from the customer at the counter.
$22.99 is what you keep and $2.01 is what you give to the government.
And, just to make sure the math works out...
$25.00 x 15 = $375
And the total taxes you would give to the government is $2.01 x 15 = $30.15. Off by 2 cents but I believe this can be explained due to rounding error which both you and I did.
Ok, I think I finally understand it all now!
By far one of the best videos you have shared . Thank you a tonnn!! One of the most simplest ways I feel to ensure Uncle Sam doesnt come knockin haha
Girl im obsessed with your with your videos. I've been open just since october '22, and every question i've ever had you've answered. thank you
Aw I’m so glad!! ❤️❤️
Yes completely helps, thank you Erika!
I get it. Thanks we have been doing it wrong. Thanks ❤️
I love when you share formula how to videos, thank you very much! I definitely understand it and I always put a screen shot of the formula in my candle making binders incase I ever forget.
Thank you so much for sharing your wisdom 🫶 you are greatly appreciated Erica!
Oh yay I’m so glad! Thank you for watching! ☺️
This made a lot of sense to me. You did a great job of breaking it down, and the comparison to a candle making formula was very helpful too. Thank you for sharing your knowledge and experiences on these types of things that are often overlooked when talking about running a business. Love it!
Oh I’m so glad! Thank you for watching :)
I'm in San Diego and was trying to figure this out. Thank you so much for the information. 😊
So glad it was helpful! Thank you for watching :)
Great presentation.
This was very help. Becaus I was doing it the same way initially but now I’m gonna switch up. Thank you. You are a big help all the time more than you know!!!
When comparing to the candle formula it made sooo much for sense that way! I was able to catch on quick! I have to say you do a great job explaining things especially when it comes to numbers! I also was never good at math and still hate it to this day but your break downs really click for me and I really appreciate you taking the time to show us! 😊 I get excited now when it comes to calculating I’m like yes, I got this! Lol
Erica!!!! This was amazing. thank you so much. I hate math (I always call m math wiz daughter when i need something like this done. ) Now I get it.
Hi! So glad you understand it! ☺️
Very helpful, thank you!
I’m so glad! Thank you for watching :)
Very helpful, TFS!
Thanks for watching! Glad it was helpful :)
You're starting with 100% of your sales plus the 8.75% taxes on those sales, so your starting amount is 108.75% of sales (or 1.0875 times sales). That's why you divide by 1.0875 to get your actual sales figure.
Then, once you have your total sales amount, you know the rest was taxes.
Oh this makes so much sense!!! Thank you for explaining it! ❤️
@@MemoryBoxCandleCo You're most welcome!
I love your vids, and your math was perfect - I just thought knowing "where that 1 comes from" might help if anyone's struggling with why the math works out. :)
It's easy to get confused when you're working backwards from a total. lol.
It helps even though I'm in NY
Oh good!!
Thank you so much! You’re so helpful!!! How do you go about collecting taxes outside of California?
As far as I know I’m not required to collect sales tax outside of CA ❤️
@@MemoryBoxCandleCo thank you🫶🏽 right now I’m struggling a little on setting up my website (I’m also selling candles) and was wondering if you can maybe make a video on the back end of creating an online shop. Or if you have a video already, I would love to watch ✨
thanks for the video, very helpful. Do you consider Shopify to be accurate on their sales tax collection? I've used their reports and didn't question it when I remitted my sales tax. I've also used Shopify's POS system on my iPhone and ran the sales tax report and it looked accurate. Anyhow, just wondered what your thoughts were on that. Thanks!
It appears to be accurate! I haven’t had any issues so far :)
Hi there! Are we supposed to be paying excise tax?
A few questions, do you only include sales tax in the price at markets? If you do charge sales tax separately on your website, do you only pull the sales from your CA customers at the end of the year? And if you do include it in the price online, how do you not charge the non CA customers sales tax? Hopefully my questions made sense....thanks for all of your content ❤
Sales tax is only included in the price at markets, if anyone from California purchases from me online they will be charged additional sales tax based on their purchase price at checkout. There is a sales tax report page on Shopify where I am able to gather that information :)
Hello, quick question. I started a candle business last year and I wanted to know if you registered your business in every state for out-of-state buyers. Or are you charging the out-of-state buyers your sales tax rate?
I had that same question. Does shopify automatically just charge the customer tax?
Hi! Do you charge/collect sales tax on your website when someone from CA orders from you?
Yes I do!
I don't sell candles, but do have a craft show business, and your tips have been sooo helpful! I've been binging your business videos!
Oh I’m so glad!! ☺️
Hi Erica, I have a question about taxes for single member LLC’s. Do you file your taxes on a 1040 and on form 568? This stuff is so hard to understand for myself 😢
I’m so sorry I can’t help with that because my CPA files everything for me :/ also I’m incorporated so I think it works a little different.
Highly recommend you get with a CPA to make sure you’re filing correctly!
So how do you handle someone buying at your booth and then going to your shop online next day and buying same product but being charges the sales tax?
Most of my local customers don’t mind the extra charges when they know it’s being shipped to them, and a few of them have asked to meet up to do cash or venmo transactions. I haven’t had anyone complain!
I would tell them it was the show price.
Interesting. I haven’t had issues with customers not wanting to pay tax. I think it shows you are a professional business and I would worry in a audit they (the state) want you pay sales tax on you stated sales price in which you forgot to collect tax (but you still will owe the state). I’m sure I’m probably not right about being to back out the tax after the sale, but seems like a lot of work to collect less money. Just my opinion.