Navigating Sales Tax Return Filing is very important for your business in case state regulations and tax rates vary throughout the US. So, selecting the right sales tax return submission format will help you to avoid fines and ensure your business's compliance. Whether you file manually, electronically, or by a third party, the right choice will go in for smooth sailing. Here in this blog, we are going to discuss the different formats for which sales tax return filing and how the best choice can be made for your business. In addition, we will be discussing how outsourcing tax preparation may provide relief from the pressure built up while preparing taxes.
What Are the Different Sales Tax Return Filing Formats?
Step 1: Identify what options are open for you to file a sales tax return. Most of them fall into the following:
- Manual Filing: As the name suggests, manual filing means writing on forms and mailing them to the tax authority. The simplest, though highly likely error-prone, and quite time-consuming option,
- Electronic Filing (e-Filing): e-filing allows companies to fill out their returns online. It is quicker and more accurate than filling them out on paper. Most American states promote or require electronic filing for sales tax returns.
- Outsourced Filing Services: Most businesses employ the services of third-party firms specializing in preparing taxes to help prepare their tax returns. Hiring these services from data gathering to submittance ensures that this process is done correctly while minimizing instances of mistakes.
Why Outsource Tax Preparation for Sales Tax Filing?
- Time-Saving: Tax preparation outsourcing gives your employees sufficient time to indulge in the core business activities. This is because they have less time to spend long hours preparing sales tax filings.
- Increases Accuracy: Tax professionals can avoid costly mistakes. Every state has different sales tax rules, and applying for tax preparation outsourcing services ensures that all those requirements are met.
- Cost-Effective: Though a cost is involved while outsourcing it's much less than that of an in-house accountant, hiring one, or the fine paid to the government for mistakes at the time of filing taxes. Outsourcing Tax Preparation services will bring to you professionals who are always updated with tax laws. This will lead to error-free as well as timely filing.
- Multi-State Compliance: This can be complex for companies that operate in several states. The complexity of state and local sales tax is eased by outsourcing tax preparation.
How Do I Choose the Best Format for My Business?
- Measure the Size of Your Business: Small businesses with low sales will rather file manually, but bigger businesses would prefer the method of outsourcing due to the intricacy involved in the process.
- Think About Your Resources: Do you have an accounting staff in your business? If no, then outsourcing could be the best alternative. You are hiring professionals through the process of tax preparation outsourcing to avoid overwhelming yourself.
- Consider the Complicacy of Your Sales: Do you conduct business in multiple states or deal with different product categories? The more complex your sales tax situation is, the more likely you are to need someone to outsource tax preparation services.
- Technology and Automation: If your business is "tech-savvy," electronic filing could be the way to go. That said, smaller businesses or those without a tech infrastructure will find efficiency in outsourcing tax preparation.
- Review Your Budget: Consider the cost of outsourcing versus the threat of fines or penalties associated with errors in sales tax returns. To most businesses, this sets aside the costs, and the saving due to outsourcing is much greater compared to the cost.
Benefits of Outsourcing Tax Preparation Services
- Reduced Administrative Burden: In any business, using tax preparation outsourcing services helps in increasing growth since tax experts take over all the minute details about tax returns.
- Compliance Guaranteed: You can be ensured that your sales tax return is prepared correctly based on the different states' requirements, especially if you have businesses in various jurisdictions.
- Flawless Filing: You may be ensured with accurate and on-time filing of your sales tax because of outsourced tax preparation. You will avoid penalties due to errors caused by improper sales tax filing because of outsourced tax preparation.
- Risk Management: Most outsourced tax preparation services include audit protection so you may be safe from any tax inquiry.
- Cost Efficiency: Although outsourcing tax preparation comes at a cost, it's generally less expensive compared to hiring an accountant as an employee and does not have any risks of fines.
How to Outsource Tax Preparation Services?
- Research Providers: Find companies that are in business to provide outsourcing for tax preparation services. Ensure they are experienced with the tax laws for the United States and have knowledge of sales taxes.
- Request Proposals: Review different quotes and service provisions from providers. Ensure their performance, opinions, and experience in outsourcing tax preparation.
- Check for Multi-State Abilities: In case you have a business operating in more than one state, ensure the firm can handle multi-state sales tax filings.
- Technology Integrations: Most outsourcing firms offer software integrations that make the process of filing taxes easier. Ensure your provider uses the updated technology.
- Performance Checks: Once you outsource tax preparation services, be sure to regularly check on the performance of your provider. Be sure they are meeting deadlines and giving correct returns.
Conclusion
Making the right decision about what form your company will use for its sales tax return is another important step. Whether it is completed by hand, electronically, or through outsourcing to a tax preparation firm, the right decision saves time, prevents errors, and ensures compliance. For companies growing or with multiple states, tax preparation outsourcing services will provide the expertise and efficiency needed. Take time to consider how your business needs will be serviced and what approach will best meet the objectives you require with the resources you have.
FINO Partners has a history of offering tax preparation outsourcing services, especially to US business firms. Whether you're talking about sales tax filing to multi-state compliance, FINO Partners will help make your tax processes easy and hassle-free, so you have more time to spend on other things that matter-growth for your business.
