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Amazon to Collect California Sales Tax

Starting September 15 Californians and Pennsylvanians will have to start paying sales tax on Amazon purchases

Listen up Amazon junkies. Starting September 15, Amazon purchases are about to get a whole lot more expensive for customers living in California and Pennsylvania. That’s because Amazon has agreed to start collecting sales tax for these two states.

This means that you better bulk up on online goods now if you want to save money.

For shoppers in these states, sales tax amounts to no inconsiderable sum. Californians pay somewhere in the neighborhood of 7.25% – 9.75% of sales tax on purchases. Pennsylvania residents, in contrast pay about 8% in sales tax.

One of Amazon’s great advantages over its brick and mortar competitors used to be its lack of sales tax, which made its goods considerably cheaper. It used to pay sales tax only in the states where it had a physical presence, such as a distribution warehouse. But over the last few years, the trend has been a new willingness on the part of Amazon to cut deals with states and start collecting sales tax. Continue reading “Amazon to Collect California Sales Tax”

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Business Travel Tax Deductions

Many of the expenses involved in a business trip are tax deductible

Those who have to do a lot of traveling for work will be relieved to know that you can deduct many of those expenses and thus significantly lower your tax bill.

What travel expenses can I claim?

According to the IRS, you can claim the “ordinary and necessary expenses of traveling away from home for your business, profession, or job.”

Be warned: the expenses cannot be “lavish or extravagant” in the eyes of the IRS. Obviously no personal expenses are deductible either. It might make sense to exclude questionable expenses from your return as they can increase the chance of you getting audited.

The travel expenses you can deduct include Continue reading “Business Travel Tax Deductions”

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Is Income from Solar Panels Taxable?

If you sell electricity or credits from your solar energy panels, you may have to report that income to the IRS.

There has not been a definitive ruling from the IRS on how exactly to treat income from solar panels on your taxes. The best course of action is to consult an accountant or tax lawyer on the details of your specific situation. Remember, if you fail to report this income correctly, the IRS could hold you responsible for back taxes, as well as penalties and interest.

That being said, there are really two distinct issues at play here: electricity and energy credits. Making money producing and selling electricity is totally separate from making money selling energy credits.

Let’s tackle the issue of electricity first. Of the two, it’s the most cut and dry. Income from electricity generated from solar panels is no different from any other income and is therefore taxable.

When asked about this issue, IRS spokesman Gregg Semanick responded, “All worldwide income is taxable unless specifically exempted by the Internal Revenue Code (IRC). In this case, it is not exempted by the IRC and is taxable income.” Continue reading “Is Income from Solar Panels Taxable?”