I know all states and jurisdictions have different rules but does this sound right. I called PA open for business since I live in pennsylvania and asked the rep. who answered the phone if I needed to apply for a sales tax permit for the services I am going to offer to businesses. She replied by saying no you do not because your services are considered professional services do not have to include a sales tax. Does this sound about right. I know I will have to pay taxes on my income -- I'm a sole prop. so I can just do that on my yearly tax return. Also, how do I know or where should I go to find this out on how much profit do you have to make to do quarterly filings for tax purposes because I would prefer to do it yearly but don't want to get in any sort of trouble if I should have done it quarterly. I know once you start making quarterly taxes the irs expects them every quarter and I am doing my business part-time so I doubt I will have that much profit in the beginning and it may flucuate depending on the effort I put into my business..

Yes, it sounds right that you won't have to pay sales tax for a services only business.

Try searching the IRS website for required quarterly filings. My understanding is that you should make quarterly tax deposits on ANY profit you make. I recommend you deposit 18% of your profit to the IRS. And, BTW, these are not TECHNICALLY quarterly. The tax deposits are made in April, July, September, and January of the following year. For more information on basic bookkeeping for your business, check out my archived chat on VAF located HERE.

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Lily Chambers, The Virtual Office Goddess, LLC
Author "How to Do Your Own Small Business Bookkeeping"

Thanks for this info. I was wondering the same thing!

VAHadry,

I am also in PA and you are correct on the sales tax. Because we are a professional service we pay no sales tax. However, keep an eye on that since the Gov. wants to start taxing professional services in his new tax plan.

As for quarterly, to avoid possible penalties you should make the payment. There are several online calculators that can help you to determine the amount based on your status, other incomes, etc. I think H&R block has a free calculator.

Best to you.

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Lee Drozak
My Office Assistant