Peace of Mind with A2X and TaxJar
Estimated reading time: 5 minutes.
If you’re getting serious about your Amazon ecommerce business, you’ll already have yourself dedicated cloud-based accounting software, like Xero or QuickBooks.
Hopefully, you’ll also have integrated A2X so you have timely, usable sales data and reporting at your fingertips.
The next thing you need? Sales-tax software.
The cold hard truth is that if you’re selling via Amazon FBA, at some point you’re going to be paying sales tax – and that’s when your accounting can get complicated, especially if you’re selling in the US.
Sales tax is a US tax, where a small percentage of a sale is added by the online retailer and passed on to the state. As an ecommerce retailer, it’s your responsibility to charge buyers and pass on the correct amount of sales tax.
Since the United States has multiple sales-tax authorities, that can be tricky, to say the least.
Sales tax is primarily determined by something called ‘nexus’ – in other words, a connection to a particular state. For Amazon FBA sellers, if a state you sell into has an Amazon warehouse there, this will trigger nexus.
There’s no debating that taxes can be a lot to keep track of - and can cause undue stress. Knowing when to charge sales tax, how much to charge in each state, when sales tax is due makes for hours of work. Hours which, if we’re being honest, can be better spent elsewhere.
Like most things these days, a bit of clever software can make all the difference. The most clever of these software integrations for Amazon is Xero combined with A2X and TaxJar.
How TaxJar Works to Make Sales Tax Simple
TaxJar is a simple, automated sales tax app that helps you make sure you know how much you owe: No more frustrating, error-filled manual spreadsheets required.
TaxJar takes care of all the tricky admin involved with sales tax. In their own words:
“We obsessively leverage technology and exceptional customer service to help you focus on what matters most.”
TaxJar gives you the time and ability to focus on what you need to manage and grow your business.
Even during peak sales periods, it continues calculating sales tax in real time.
Black Friday? Cyber Monday? Business as usual? It’s no problem for TaxJar, it can perform hundreds of millions of sales tax calculations, with average response times as short as 18ms.
TaxJar also maintains a 99.99% uptime without breaking a sweat - something you’d be hard pressed to avoid if manually reconciling.
When linked with Xero (TaxJar does not support Quickbooks currently), it works by importing your order history, pulling out the sales tax collected and calculating how much sales tax you owe to each state, when, and how often. This significantly reduces the margin for error and the stress of remitting your tax return.
Once you have TaxJar hooked up, you’ll:
- Know exactly what you should be paying in each state based on whether it has an Amazon warehouse (aka sales-tax nexus). TaxJar simplifies the economic nexus.
- Work out with the TaxJar sales tax calculator if the tax amounts you’ve been paying are correct.
- Get a rough idea of what you might owe, if you’ve not been collecting tax at all.
- Say goodbye to manually breaking down sales tax for each state – TaxJar will do it for you, ensuring your taxes are correctly calculated and paid, every time.
- Have your sales tax reports updated every day so you can stay on top of things, and file on time.
- Receive reminders so you never miss a deadline to file.
How TaxJar and A2X Work Together
Together, A2X and TaxJar (along with Xero) are a triple threat: a powerhouse of automation.
When combined, these tools will help you to grow your ecommerce business effectively and efficiently, with data you can rely on. It’s the ideal back-office setup for any ecommerce seller looking to take their business to the next level.
A2X has helped thousands of Amazon FBA sellers to better understand where their business is headed, with usable sales data and reporting.
It works by arranging the data from Amazon and sending it straight into Xero or QuickBooks, where you can start using it. No more manual entry or guesswork and no more room for human error.
A2X also helpfully records the tax collected by Amazon, including marketplace facilitator tax.
This data is then used by TaxJar to produce your sales tax reporting. That also includes creating ‘bills’ in your Xero account, so you know when your sales tax is due and how much you owe. Easy, right?
Manual reconciliation of accounts and tax calculations has traditionally made up a huge proportion of business owners time. In the past, it was, by and large, the most time-consuming aspect of business ownership also.
By combining these three intelligent account automation tools, accounting and taxation can become just one small part of your business, making your entrepreneurial endeavours infinitely more enjoyable.
Automation Frees You Up
Automation is the key to reducing the stress around business finances, and keeping good records will help you better grow your business.
A2X updates your accounting software with usable data from Amazon, and TaxJar updates Xero with the most up-to-date sales tax totals.
Whether you’re managing your own accounts as a seller or working with an ecommerce accountant, automation is the future.
Your time is valuable, A2X and TaxJar work to give you as much time back, away from admin, as possible.
This all ties together to mean that you’ll get peace of mind knowing you have a powerful and automated administration trio. A2X, Xero and TaxJar work together to keep your finances in check, even when you’re asleep. So you’ll quite literally have more time on your side to get on with making dreams happen.
Also on the blog:
- How-to Guide: Collecting Amazon Sales Tax
- Intelligent Automation for the Amazon Seller
- Sales Tax Nexus Trends: What Amazon Sellers Need to Know
- Bookkeeping: No Longer the Bane of the Booming Amazon Business
- Understanding Ecommerce Sales Tax
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