Taxes - Frequently Asked Questions

We get a lot of tax-related questions on our support chat, so in the interest of sharing that knowledge with the wider Report Toaster community, we thought it was time we compiled an FAQ for all questions pertaining to taxes. 

Note - A good place to start is with our Tax Reports, which can be found under the Taxes section. We'll be referring to several of these reports throughout the article. 

Where does this data come from?

Directly from your Shopify account (more specifically, the tax lines model). To see the equivalent data in Shopify, navigate to Analytics -> Reports, scroll down to the Finances section, and then look at the Taxes report. 

This is a good place to check if you are confused by any of the information we have or want to verify the numbers in Shopify. If you have concerns over the numbers Shopify is reporting, we suggest you contact their support. 

Why are Report Toaster tax reports better than Shopify's? 

Both Shopify's tax reports and Report Toaster's use the same data model and the same calculations to ensure that our numbers are accurate.

But as anybody who has used Shopify extensively knows, that there are certain limits to their reports. The information is all there, but it's not always easy to access or customize to get the numbers that you're looking for. 

In comparison, we have several dedicated reports - all of which can be customized to suit the needs of your individual business:

1. Taxes by Jurisdiction, to see exactly how much you owe to each tax authority. 
   
2. Reports for both your Taxable and Non-Taxable sales to see your Monthly totals.
   
3. An order Tax Lines report so you can examine taxes on an order-by-order level.

This inherent level of customization makes it much easier to get the exact figures you are looking for. You can even save and schedule these reports for future delivery so you always have timely access to your data.   

How does Report Toaster compare to other dedicated tax-apps, like TaxJar?

Both our app and TaxJar use the same data model and the same calculations provided by Shopify. However, Report Toaster has a number of advantages:

1.) Our information is pulled in real-time, which makes it more accurate**.

2.) Our ease of customization and automatic scheduler make it easy to get the numbers you need in the exact format you're looking for. 

3.) Our plans are cheaper  - anywhere from 2-20x less for our paid subscription (!).

**See here for more information.

In short - if you aren't using TaxJar for automatic filing, you are likely overpaying! Report Toaster can provide the exact same information in a more easily adjusted format for a fraction of the price. 

What are Taxable vs. Non-Taxable Sales? 

Taxable Sales is the Net Sales total for all line items that were taxed (namely, had a Taxes amount greater than 0.00).  

Non-Taxable Sales is just the opposite, the Net Sales for all line items which were not taxed (Taxes equal to 0.00). 

So, when you're filing your sales taxes and the field asks for your total Taxable (or Non-Taxable Sales) for the year, quarter, month or whatever, you can pull this figure from the Monthly Taxable (yellow) /Non-Taxable (green) Sales reports respectively here: 

What is Nexus? 

Primarily used in the US, the Nexus is the connection between your store and a state to determine if you have a tax liability there. 

Nexus can be either physical or economic:
Physical Nexus - You have a physical presence in the state (typically, your business location). E.g. a Store, Warehouse, Employees, etc. Note - some states have a broader definition for physical nexus than others. Odds are that if you are a merchant in the US, you have at least one physical nexus.

Economic Nexus - If you exceed a certain threshold for sales to a certain state, that state might require that you collect sales tax on either the volume or value of transactions going into a certain state. 

See here for more information: https://help.shopify.com/en/manual/taxes/us.

What all this tends to mean is this. If you have a nexus somewhere (physical or economic) you are probably going to be required to collect sales tax on orders shipped to that state. And, so long as taxes have been correctly applied to those orders, these orders will then be recorded under your taxable sales (see above).

How do I know if I exceeded a threshold for Economic Nexus?

You're in luck, we have a dedicated report specifically for that!

Check out our main guide here. 

How do I see how much I owe to each jurisdiction?

Start off with the Taxes by Jurisdiction report. This report looks at all your Taxable Sales and adds up the totals for how much you owe to each tax jurisdiction. Typically, the report displays one row by Tax type (so this might include the rows and totals for each applicable City Tax, County Tax and State Tax).

How do I add State/Country to this report?

No problem. Top right, you can click the columns button. From here, you can drag/drop whichever columns you need from right to left to include them on the report. 

Typically for State you will want to use Shipping Address / Province. 

For Country, use Shipping Address / Country

Note - This isn't strictly necessary for filing taxes, but it can be helpful if you're trying to keep track of what you're doing or filing in multiple jurisdictions

How do I narrow this down to only a certain State/Country?

Top left, where it says Select a filter. Click that, and choose either Shipping Address / Province or Shipping Address / Country, "equal to", and then enter the name of the State or Country you want to filter down to accordingly. 

Hit Return (Enter) to apply the filter. 

Note - Again, this isn't strictly necessary for filing taxes, but it can be helpful if you're trying to keep track of what you're doing or filing in multiple jurisdictions.
You also don't need to have either Province and/or Country added to the report for the filter to work, but it can be helpful to check errors/spelling if something hasn't worked correctly.

How do I change the report to be Last Month/Last Quarter/YTD/Last Year... (etc)? 

Go to the top right and you'll see a dropdown for the date (yellow). This will let you adjust the date range to whatever you need, depending on whether you are filing monthly, quarterly, yearly and so on. 

Next to that, you will see another dropdown for the breakdown (green). This will let you adjust the report to whether you want a Daily, Weekly or Monthly breakdown, or just a Summary (the totals for the entire period). Typically, most users will want to use Summary for their tax reports as they're only interested in the Totals for the selected period. However, with some of the other report types (explained below), it can be useful to see a breakdown, particularly if you're troubleshooting.   

Can Report Toaster support agents help me file my taxes?

Short answer: No. 
Long answer: We are not Certified Public Accountants (CPAs) nor, for liability reasons, can our agents help you with submitting any of your tax filings. Report Toaster does not hold any responsibility for taxes being filed incorrectly or for the accuracy over any of the relevant information.  Report Toaster is designed to provide you with the information that is stored in your Shopify account. Any calculations and numbers regarding your taxes, sales totals, amounts owed etc. all come from Shopify - we just make the data more easily accessible. 

If you need further assistance when filing your taxes, we recommend you either locate a CPA or speak to your regional tax authority. 

Can Report Toaster file my tax information automatically? 

No, and we do not plan to add this feature to Report Toaster. 

I still need further help!

No worries. Email us to support@cloudlab.com and we'll be happy to help you out.

Try to include as much information as you can in your request about what you are looking for so that we may better assist you with your query :)

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