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How to Maintain eCommerce Tax Compliance during the Pandemic
The coronavirus pandemic has had varying impacts on businesses. Many were forced to shutter their doors, but some have been reporting a massive influx in sales, particularly those that offer household items, groceries, virus protection and sanitization, and over-the-counter drugs.
Whether your business is experiencing a sales up or a sales slump, you have to be aware of eCommerce tax compliance implications. Here are some helpful tips you can follow to stay on top of the issue and reduce running the risk for tax compliance.
What Do I Need to Know If My Sales Are Way Down?
If your eCommerce sales are tanking this troubling time, make time to understand and manage your tax liabilities. Navigate during these challenging times by considering lending options and grant solutions to assist you with your rent, mortgage, paying payroll, or other high-fixed-cost business expenses.
To stay on top of your Paycheck Protection Program (PPP) and have a higher chance of securing new funding, explore financial resources available to you and take advantage of them. You can also use them to gain efficient access to lenders and boost your chances of having your application viewed in new funding rounds.
Look for banks that welcome applications from non-customers. You can also try contacting your local community bank that is processing PPP applications to have your application accepted. In addition, you can have access to refund cash. The Internal Revenue Service (IRS) now allows carryback to offset income from previous years for businesses with unused net operating losses.
Cashflow Video Guide
Learn the simple steps to prepare cash flow projections to improve your business cash flows.
What Should I Do If My Sales Are Way Up?
Your business impacts your tax liability once you transition from having a physical store to an online one or you are seeing high sales growth due to the pandemic. While you may be feeling gleeful about your rising sales, remember that you have to maintain eCommerce tax compliance. Income and sales tax compliance problems also usually multiply during growth periods, so make efforts to be ahead of this.
Thorough planning can help you prevent any sales tax problems, especially when you are adding products or services, expanding locally or internationally, or selling online through affiliates due to the pandemic. You can restructure your business to save money on taxes during tax season with help of a firm that specializes in accounting for startups. An increase in sales is the perfect opportunity to reduce your tax burden and get everything in order.
Consider using reliable software programs to efficiently automate your sales tax process. You can also work with our business accountants who offer tax planning and compliance services. We can serve as your strategic innovation partners who can help you bring clarity, scalability, and growth to your business finances and help you free up your time so you can focus more on growing your business during this stressful time.
Conclusion
Whether you are seeing an increase or decrease in your income during the pandemic, remember the options listed above so you can have peace of mind knowing that you’re staying on top of tax compliance. Take the necessary steps to safeguard your business as your operations return to normal and consider hiring skilled accountants to avoid encountering any tax problems.
FiBrick is a people-centric accounting company that specializes in serving startups and scale-ups in the US. Contact us to schedule a consultation!
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