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Old 11-30-2015, 09:11 PM   #1
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How to charge tax?


New to handyman biz, trying to understand how to charge it. Buying taxfree, do i charge it to the client item by item or total of bill?

In NC each county has differnt tax rates, so if i buy pvc in one county and brackets in another am i supposed to charge each counties rate? This is crazy stuff, please help thanks

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Old 11-30-2015, 09:24 PM   #2
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In Iowa we add 7% to total bill . There are entities that are tax-exempt (meaning you neither collect or pay sales tax) . These include Govt. , tax-exempt entities .

I assume you already have a permit ?!?!?

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Old 11-30-2015, 09:29 PM   #3
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Im licensed electrical, dont need a permit for most work i do. So you charge total, does each county in your state have different rates? If not then total makes sence. I have a feeling i need to charge per item, thats going to be a nightmare, like im going to remember where i bought that wire 6 monts later.
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Old 11-30-2015, 10:05 PM   #4
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1) This question is well suited to contractor talk.com, a sister site to DIYChatroom.

2) Taxes are charged where the job is.
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Old 11-30-2015, 10:24 PM   #5
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Thanks I'llo look over there...


...but are the taxes charged per Item where I bought it? or total materials?
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Old 11-30-2015, 10:30 PM   #6
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Not sure if we're talking the same thing .....you need a sales tax permit in NC , don't you ???
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Old 11-30-2015, 10:31 PM   #7
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Total materials at the job site
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Old 12-01-2015, 12:05 AM   #8
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This is more of an accountant question. You charge them for the taxes. So if you go purchase the materials at consumer cost. The taxes that you paid, are included in the price of what you charge the customer. Any stock that you use, that you keep on your truck, can be charged taxed, but they have to be done as a separate item. Labor is always quoted full hour, even if it only takes you a half hour. Some people do give a little wiggle room if the customer is one that they do work for them all of the time.

Intuit.com and irs.gov are great websites. You can also schedule an appointment with your local IRS, State Tax office or even with SCORE, who are individuals who are business parties or accountants, that would gladly sit with you and go over your business plan.

I have used SCORE in the past, when I was doing some side work to make some extra money when I got out of the military. They were really great in giving me a lot of good information on what I needed to do. Even though I have over six years of accounting classes, there are areas that you do not touch into, unless you move into the CPA part of accounting.
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Old 12-01-2015, 12:06 AM   #9
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Quote:
Originally Posted by dd57chevy View Post
Not sure if we're talking the same thing .....you need a sales tax permit in NC , don't you ???
You can use your SSN for your Tax ID when filing. If you are buying tax free from a company. You need the Tax Exempt letter when you go to pick up materials.
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Old 12-01-2015, 04:11 AM   #10
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Thank you...


..Great information, thank you all very much.
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Old 12-01-2015, 05:44 AM   #11
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Just remember that that you cannot tax someone on something that you paid tax on already. Also you cannot break it down on their invoice for what you paid tax on.

Quicken is the best software out there for this kind of stuff.
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Old 12-01-2015, 07:13 AM   #12
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In NY we don't use our SS number for sales tax purposes any more.

We apply at the county level to get a sales tax ID number issued to us. Once we have that we can then Collect sales tax on the customers bill. The sales tax is figured on the total of the bill. for example, if I do a job where there is $500 Material and $1000 labor the total bill is $1500 and there will be $120 in tax in my county. If I do the work in a neighboring county, I have to collect the tax at a different rate (all around me are higher). I also have to account that in my books differently as I have to remit that collected tax to the county I worked in. Except, I don't send the money to the county, I send it to the state. The form needs to be filled out with the proper amounts dictated to each county I worked in.

Now, that sample was pretty simple. Where it gets confusing is your tax exempt status with your suppliers. You have to provide each of them with a tax exemption form for their records. If you purchase something from a supplier that you do not have a tax exempt status with, you will be charged sales tax at the time of purchase. When you figure your bill, you need to calculate into that any amounts that already had tax collected on it. Does it always get done????

Using the box of wire scenario that was posted earlier...If I buy a 250' box of wire and use half on a customers job then the tax will be figured on my charge to the customer for 125' of wire cost. The other 125' of wire will be inventory until it gets used on another job, at which time the tax will be collected on that amount. Learning the basics of accounting is a valuable aid in getting this all figured out. Once you get a system down for keeping track of purchases and expenses for the business it will get a bit easier. This is the hardest part of running a business. I see a lot of guys come and go around here. Most of them are talented carpenters, electricians, etc. The problem they have is they do not know how to take care of the business side of things and run out of money fast. Just because a customer hands you a check for $1000 does not mean you made that and can spend that
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Old 12-01-2015, 08:09 AM   #13
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You do likely need a sales tax permit from the state. You should be able to get all the rules and regs from the State of North Carolina when you get your permit. You should also seriously consider forming an LLC for your handyman business to help protect your personal assets in the event someone brings some kind of judgement against you.
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Old 12-01-2015, 10:38 AM   #14
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Quote:
Originally Posted by danpik View Post
In NY we don't use our SS number for sales tax purposes any more.

We apply at the county level to get a sales tax ID number issued to us. Once we have that we can then Collect sales tax on the customers bill. The sales tax is figured on the total of the bill. for example, if I do a job where there is $500 Material and $1000 labor the total bill is $1500 and there will be $120 in tax in my county. If I do the work in a neighboring county, I have to collect the tax at a different rate (all around me are higher). I also have to account that in my books differently as I have to remit that collected tax to the county I worked in. Except, I don't send the money to the county, I send it to the state. The form needs to be filled out with the proper amounts dictated to each county I worked in.

Now, that sample was pretty simple. Where it gets confusing is your tax exempt status with your suppliers. You have to provide each of them with a tax exemption form for their records. If you purchase something from a supplier that you do not have a tax exempt status with, you will be charged sales tax at the time of purchase. When you figure your bill, you need to calculate into that any amounts that already had tax collected on it. Does it always get done????

Using the box of wire scenario that was posted earlier...If I buy a 250' box of wire and use half on a customers job then the tax will be figured on my charge to the customer for 125' of wire cost. The other 125' of wire will be inventory until it gets used on another job, at which time the tax will be collected on that amount. Learning the basics of accounting is a valuable aid in getting this all figured out. Once you get a system down for keeping track of purchases and expenses for the business it will get a bit easier. This is the hardest part of running a business. I see a lot of guys come and go around here. Most of them are talented carpenters, electricians, etc. The problem they have is they do not know how to take care of the business side of things and run out of money fast. Just because a customer hands you a check for $1000 does not mean you made that and can spend that

excellent information, I greatly appreciate it.

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