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Okay, what’s the worst part of running an eCommerce store? Yep, working out your tax return. This can be the bane of your life and for most, its also the boring part of running any business.
It would certainly help if there was a program that could accumulate all your tax information, and submit your tax return for you. Wouldn’t that be awesome! Well, you may just have found that ideal program that will help achieve this task.
I give you…TaxJar!
So let’s have a look at what is TaxJar, and see how it will help your online eCommerce store.
Product Name: TaxJar
Owner/CEO: Mark Faggiano (CEO)
Product Type: Online program to help with eCommerce US Tax returns.
Price: Varies. Basic Annual subscriptions start at $17 per month.
Best For: eCommerce Store Owners
Program Summary:In my opinion, TaxJar will be your savior when it comes to working out your tax details at the end of financial year.
Would I Recommend It: Yes. This could save you lots of time and hassle at tax time.
What is TaxJar
The TaxJar program is a paid online service that will help online business owners, in particular eCommerce store owners, complete their tax details. This includes accumulating all the sales data from their online store, and presenting it for use at tax time.
There’s 2 different methods that TaxJar works by.
- Manual – This service will provide you with all your taxation statistical data ready for you to manually file your tax return.
- Autofile – A premium feature in which TaxJar will calculate and file your tax return for you.
As an online store owner, you owe it to yourself to make things as easy as possible. That’s the prime objective of TaxJar, which does all the calculation work for you, and provides you with reports ready to submit to the tax man.
Taking a look into TaxJar, I was a little concerned that it was for US residents only. Until I discovered that international eCommerce owners can also use this service. However, not all categories are supported by TaxJar.
For instance, Food & Groceries are supported in Australia, Europe and the US, but other categories are excluded. You can see the full list of TaxJar supported categories here.
Now, if you’re an international eCommerce owner that sells merchandise or other services, you may still want to use TaxJar because if you make sales in the US. This product can make the taxation through sales transactions in the US easier, which you can combine with your local sales tax returns.
Getting started with TaxJar is simple, and you can check out the free trial here.
There’s also a video that explains the setup process, which you can see below.
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TaxJar From The Inside
When you first sign up with TaxJar, immediately you’ll be presented with some of the major integrated partners that TaxJar works with. These include the following:
Apart from these well known companies that integrate well, there’s loads of other apps are compatible with TaxJar. This list will only grow over time, but as of writing this TaxJar review, these other programs will also integrate with TaxJar:
To use TaxJar, you will need to have ‘Nexus’ connection. Each US state has to be significant enough for the requirement to comply with the state’s sales tax laws. If it is significant enough, it becomes sales tax nexus defined.
Effectively, sales tax nexus is the connection between a seller and a state that requires the seller to register, collect, and remit sales tax on sales made in that state.
Using TaxJar is fairly simple, just connect your store, via the apps in the TaxJar platform. Once this is done, all the accumulated sales transactions that have taken place will be accumulated, and categorically stored for use at tax time.
I really like that Taxjar provides a page which encompasses various videos explaining how TaxJar works. This includes several videos including:
- Dashboard Overview
- State-by-State Reports
- Estimated Sales Tax Due Reports
- File Returns with TaxJar
You can also watch any of the 100 videos (approx.) available on the TaxJar YouTube channel.
The TaxJar dashboard is clean and easy to navigate. Below is a TaxJar example job which shows the user interface with navigational menu at the top.
As you can see, your collected sales data is shown state by state. This will automatically be accumulated when you connect your TaxJar account to your online store. You can also add states if you intend selling in a different region in the future, or you’ve just started selling in a different state.
To get a better handle on how TaxJar can make your life so much easier, watch the video below that explains just how effective this program can be.
You’ll find there’s various plans you can join with TaxJar, but you won’t find a free TaxJar plan. The TaxJar payment plans are generally determined by the amount of transactions you make per month.
It will also be slightly cheaper if you pay on an annual basis. This is a monthly discount you get for committing for a full year.
The lowest basic Taxjar plan can be billed at only $17 per month if you pay annually. Paying month-by-month will set you back $19 per month. Here’s a brief look at the payment plans up to 10K transactions per month.
If you’re going to take it to the next level, there are extra plans for over 10K transactions per month.
Autofile is an additional feature which you can elect to pay. This will cost you approximately $20 for each US state that you elect to file a tax return in. This price does vary depending on the type of TaxJar subscription you have (Annual vs. Monthly) and the volume of AutoFile returns you purchase.
Others states such as Texas or Washington on the other hand have more complicated tax systems, so you may prefer to pay the additional fee to have TaxJar file your returns in these states only.
As I’ve mentioned, there is a 30 day free trial to get you started and check out what Taxjar have to offer. I’m unsure if they do discounted offers but it may pay to keep an eye out over the Black Friday/Cyber Monday period.
No review would be complete without checking out what other authoritative sites have to say about a program. Not all the sites I searched have a TaxJar rating yet, but I did manage to find these ratings from GetApp, Finances Online and G2. Here’s their rating summary.
As you can clearly see, the reviews are extremely complementary with high ratings. This suggests to me that using TaxJar will help with filing your tax returns and keep all your tax documentation in order.
Would I Recommend TaxJar
Now that TaxJar can Autofile your tax returns, it’s made a big difference for some of the states with more complicated tax systems. Even though some people may choose not to use the Autofile feature, the standard TaxJar program is still a lifesaver for those that are unfamiliar with their tax obligations.
Many people begin selling products via an Amazon store or their own Shopify business, but the last this they want to deal with is tax. I’m a big one for dealing with what you are good at, and if that means paying for a third party to organise your tax filing, then I’d do it.
Yes, I would recommend TaxJar.
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As any online store owner will tell you, it’s much more enjoyable finding and promoting new products than it is doing your tax. Personally, I couldn’t think of a more mundane activity tha tax, which is why I pay somebody to do it for me.
I’m not into selling goods online myself, I’m an affiliate marketer. Having said that, I’ve tried my hand at dropshipping through a Shopify store, before settling on an affiliate marketing career.
I understand how much there is to do, just to keep an online store running smoothly. Not only do you have product sourcing to do, but dealing with customer service, invoices, email marketing, paid advertising and so on.
So make it easier on yourself, get the tax guys to do the tax stuff!
Hi, I'm Nudge
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