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7 Reasons You Need a CPA for Your LLC Taxes

Summary of What This Blog Covers:
  • 📌 Stay Ahead of Deadlines & IRS Compliance – Tax deadlines can sneak up fast, and missing them results in hefty penalties. A CPA ensures your LLC meets all federal and state tax deadlines, files the right forms (1040 tax form, Form 1065, 1099 tax form, W9 tax form, etc.), and remains 100% IRS-compliant to avoid audits and legal issues.

  • 📌 Maximize Deductions & Keep More of Your Profits – Most LLC owners miss out on valuable deductions, overpaying the IRS. A CPA accountant near helps identify tax-saving opportunities, from business expenses and depreciation to retirement contributions and short-term capital gains tax strategies, ensuring you keep more money in your pocket.

  • 📌 Proactive Tax Planning, Not Just Tax Filing – A CPA does more than file your taxes; they create a year-round tax strategy to legally lower your tax liability. Whether it’s structuring your LLC as an S Corporation, optimizing self-employment tax, or managing capital gains tax, an accountant ensures your business is financially optimized.

  • 📌 More Than an Accountant—A True Business Partner – A CPA doesn’t just crunch numbers; they help your business grow. From setting up QuickBooks Online Accountant for financial tracking to managing accounts payable & receivable, an experienced certified public accountant (CPA) helps ensure long-term financial success for your LLC.

The Cost of DIY Taxes And Why Your LLC Deserves a CPA

Let’s cut to the chase: taxes are complicated. And when you own an LLC, tax time isn’t just about filing a simple 1040 tax form or using TurboTax Free File. You’ve got quarterly tax payments, deductions, compliance issues, and IRS deadlines to manage.

If you’ve ever tried to handle this alone or maybe using TurboTax Online or calling H&R Block Near Me USD, you probably realized that doing your LLC taxes yourself is not the best use of your time.

That’s where a Certified Public Accountant (CPA) comes in. Whether you’re searching for a CPA accountant near me, a certified CPA near me USD, or an accounting firm that truly understands LLCs, having the right expert can save you time, money, and stress.

Still on the fence? Let’s break down why hiring a CPA for your LLC taxes isn’t just smart. It’s essential.

1. You’ll Never Miss a Tax Deadline Again

Deadlines can be sneaky, and missing them? Costly. Every year, small business owners get hit with penalties because they didn’t know about a deadline or miscalculated their taxes.

Take the S Corporation filing deadline as an example: If you elected S Corporation status for your LLC, you need to file Form 1120S by March 15. Miss that, and you’re looking at penalties of $220 per shareholder per month.

A certified accountant near me USD makes sure you:
 ✔ File on time—whether it’s your quarterly estimated taxes, your annual return, or an extension.
 ✔ Never overpay or underpay your self-employment tax.
 ✔ Submit all required forms—from Form 1065 (for partnerships) to 1099 tax form filings.

At Insogna CPA, we track every due date for you, so you’re never caught off guard.

2. Keep More of Your Hard-Earned Money with Tax Deductions

Every dollar you don’t claim as a deduction is money you’re giving to the IRS unnecessarily. But do you know all the deductions you qualify for?

Most business owners miss at least 20% of the deductions they’re entitled to.

Sure, you might be tracking office expenses and business travel, but what about:

  • The home office deduction (even if you rent)?
  • Depreciation on business equipment (using Section 179)?
  • Health insurance premiums as a self-employed deduction?
  • Short-term capital gains tax strategies to minimize taxable profits?
  • Retirement contributions that lower your taxable income?

CPA firms expert will ensure you’re claiming every legal deduction, so you keep more money in your pocket instead of overpaying the IRS.

3. Get a Tax Plan Not Just a Tax Return

If you only think about taxes in April, you’re already behind. Smart business owners know that tax planning should happen year-round.

A certified professional accountant USD helps you:
 ✔ Reduce taxable income before year-end.
 ✔ Structure your business for maximum tax savings (LLC vs. S Corporation vs. C Corporation).
 ✔ Optimize your payroll and owner distributions.
 ✔ Use strategic investments to reduce your tax burden.

Think of tax planning like a chess game. It’s all about strategy. Insogna CPA ensures you’re always several steps ahead.

4. Stay 100% Compliant with the IRS (And Avoid Costly Audits)

The tax code changes constantly, and small business owners get audited more often than individuals. If you’re self-employed or running an LLC, you have higher odds of IRS scrutiny especially if:

  • You claim large deductions for a home office, vehicle use, or meals.
  • You file a 1099 NEC or receive a 1099K for high-dollar transactions.
  • You operate across state lines and owe sales tax in multiple states.

A CPA certified public accountant keeps you fully compliant, helping you:
 ✔ Avoid red flags that trigger IRS audits.
 ✔ File correctly especially if you’re juggling W2 form and 1099 form USD income.
 ✔ Handle complex compliance issues, like FBAR filing or 1031 exchange transactions.

At Insogna CPA, we know the tax laws inside out, so you don’t have to.

5. Get Custom Tax Advice Tailored to YOUR Business

Your LLC isn’t like every other business. So why use a one-size-fits-all tax approach?

A chartered public accountant helps you determine:
 ✔ Whether to file Form 2553 to elect S Corporation status.
 ✔ How to manage income tax chartered accountants best practices.
 ✔ Whether to use QuickBooks Online Accountant or FreshBooks for your business.

At Insogna CPA, we provide custom tax strategies based on YOUR business goals.

6. Say Goodbye to Tax Season Chaos

We all know tax season horror stories:
 ✔ Scrambling for bank statements and invoices.
 ✔ Realizing you forgot to make estimated tax payments.
 ✔ Overpaying because you missed key deductions.

A CPA keeps your books organized all year, so tax season is smooth, not stressful.

With a CPA office near me USD, tax time is:
 1️⃣ Pull up financials (already organized in QuickBooks, Waves Accounting, or ZohoBooks).
 2️⃣ Review deductions and file your business tax forms.
 3️⃣ Relax, knowing everything is handled professionally.

7. More Than a CPA: A True Business Partner

At Insogna CPA, we’re not just number-crunchers. We’re business advisors who help you:
 ✔ Manage accounts payable and accounts receivable.
 ✔ Set up QuickBooks Help for better financial tracking.
 ✔ Plan for long-term business growth and franchise tax strategies.

Your CPA isn’t just an accountant. They’re your trusted financial partner.

Take the Stress Out of LLC Taxes And Start Saving More

Let’s be real—taxes aren’t just another line item on your to-do list. They’re a crucial part of your business’s financial health, and how you handle them can mean the difference between maximizing your profits or unknowingly overpaying the IRS year after year. Every dollar counts, and the last thing you want is to leave hard-earned money on the table because of missed deductions, IRS penalties, or inefficient tax planning. Whether it’s ensuring your Form 1065, 1040 ES, or 1099 tax form is filed correctly, optimizing your capital gains tax strategy, or keeping up with changing tax laws, a Certified Public Accountant (CPA) ensures that your LLC’s tax obligations aren’t just met. They’re strategically managed to benefit your bottom line.

The truth is, tax season doesn’t have to be stressful, and managing your LLC’s financials shouldn’t feel like a second full-time job. With the right CPA accountant near me, tax preparation, planning, and compliance become seamless. Imagine going into tax season fully prepared, knowing every deduction has been maximized, every deadline has been met, and every financial decision is backed by expert guidance. No more scrambling for documents, no more guessing at tax obligations, and no more sleepless nights wondering if you’re about to get hit with an unexpected tax bill. Instead, you get a proactive tax strategy that allows you to reinvest in your business, scale efficiently, and plan for future growth.

At Insogna CPA, we go beyond filing taxes—we become your trusted financial partner. Whether you need help with self-employment tax calculator estimates, structuring your LLC for tax efficiency, or setting up QuickBooks Help to better manage your finances, our team is here to make tax season stress-free and financially rewarding. So, let’s put an end to the frustration of DIY taxes and give your business the expert guidance it deserves. Don’t wait until tax season creeps up—contact us today and let’s build a smarter, more profitable tax strategy for your LLC. Because at the end of the day, you didn’t start your business to crunch numbers—you started it to thrive. And with the right CPA by your side, you’ll do just that.

The Beginner’s Guide to BOI Filings: What Business Owners Need to Know

Hi there, business owner! Have you heard about BOI filings but aren’t quite sure what they mean? Don’t worry—you’re not alone. Navigating legal and compliance requirements like these can feel overwhelming, especially when you’re busy running your business. But here’s the good news: understanding BOI filings isn’t as complicated as it sounds, and you don’t have to go it alone.

At Insogna CPA, we help entrepreneurs like you in Austin, Texas, and beyond simplify the compliance process, so let’s walk through what BOI filings are and why they matter to your business.

What Are BOI Filings, and Why Do They Matter?

BOI stands for Beneficial Ownership Information. It’s a filing requirement designed to improve transparency in business ownership and prevent financial crimes like money laundering. As a business owner, staying compliant with BOI filings protects you from fines and ensures your company stays in good standing.

Still wondering if this applies to you? Don’t worry; we’ll cover who needs to file, key deadlines, and how Austin CPA firms like ours can help you tackle this with ease.

Who Needs to File?

Let’s start with the basics. Do you own a business in Austin, Round Rock, or anywhere nearby? If so, your entity type will determine whether you need to file BOI forms. Here’s the breakdown:

  • LLCs: Most Limited Liability Companies need to file unless they’re exempt.
  • Corporations: Same goes for corporations—filing is usually required unless specific exemption rules apply.
  • Other Entities: Partnerships and trusts may also fall under BOI filing requirements, depending on your structure.

Sound like a lot to figure out? This is where an experienced small business CPA in Austin can step in to help clarify your obligations.

Don’t Miss Deadlines—They Matter!

Deadlines are critical for BOI filings. Depending on when your business was established, you may need to file shortly after forming your entity. Missing a deadline isn’t just a small hiccup—it can result in:

  • Daily Fines: Non-compliance leads to penalties that stack up fast.
  • Increased Regulatory Scrutiny: Late filings can attract unwanted attention.

Partnering with Austin’s accounting services means you’ll never miss a critical date.

What Information Do You Need to File?

Here’s what you’ll need to gather for BOI compliance:

  1. Owner Information: Names, addresses, and Social Security Numbers (SSNs) or Taxpayer Identification Numbers (TINs).
  2. Ownership Details: How much control or ownership each person has in the business.
  3. Entity Details: Your business’s name, address, and EIN (Employer Identification Number).

Sounds tedious? We get it. That’s why many business owners turn to CPA firms in Austin, TX, like Insogna CPA, to handle these details.

How We Simplify BOI Filings for You

We understand you’ve got plenty on your plate, from growing your business to managing daily operations. The last thing you need is the stress of BOI filings. At Insogna CPA, we offer a streamlined process to make compliance effortless:

  • Stay Ahead of Deadlines: We monitor key dates so you don’t have to.
  • Avoid Errors: Accuracy is everything. As one of the best CPA firms in Austin, we ensure your filings are completed without mistakes.
  • Save Time: Why spend hours deciphering forms when a trusted CPA in South Austin can handle it for you?

We’re here to help, no matter if you’re a small business owner in Round Rock or managing a growing enterprise in Austin, Texas.

Why Insogna CPA?

When it comes to accounting firms in Austin, Texas, Insogna CPA is more than just a service provider—we’re your partner. From compliance to tax strategy, we offer personalized solutions tailored to your business’s needs. We know how to handle the details so you can focus on what you do best: building a successful business.

Let’s Tackle BOI Filings Together

Feeling overwhelmed by BOI filings? You don’t have to handle them on your own. At Insogna CPA, we specialize in accounting services in Austin that simplify compliance while empowering business owners like you.

Call to Action: Let’s get started! Contact Insogna CPA today and let one of the best CPAs in Austin, Texas handle your filings while you focus on growing your business. Whether you’re in Round Rock, South Austin, or anywhere else in the area, we’re here to help.

Why Communication Breakdowns with Your CPA Cost More Than Time

Feeling Frustrated with Your CPA? Let’s Fix That.

Imagine this: It’s tax season, and you’re waiting—again—for your CPA to respond. Deadlines are creeping closer, your questions are unanswered, and you’re left wondering if your finances are in good hands. Sound familiar?

If you’ve experienced this with Austin, TX CPA firms or have been searching for accounting services in Austin, you’re not alone. Poor communication with your CPA isn’t just annoying; it can lead to missed tax-saving opportunities, costly penalties, and unnecessary stress.

Let’s talk about why this happens—and more importantly, how you can turn things around.

Why CPA Communication Breakdowns Happen

You deserve a CPA who keeps you informed, but here’s why that often doesn’t happen:

  1. Lack of Transparency: Some CPA firms in Austin, TX don’t communicate clearly, leaving you in the dark about important updates, deadlines, or tax-saving strategies.
  2. Overburdened Teams: Larger firms, even those labeled as the best CPA in Austin, can stretch their teams too thin, meaning smaller clients like you might not get the attention you deserve.
  3. Outdated Processes: Without modern tools, like secure client portals, communication becomes reactive instead of proactive.

If you’re tired of feeling like just another number at an accounting firm in Austin, it’s time to demand better.

How You Can Take Control

You don’t have to settle for frustrating experiences with your CPA. Here’s how to ensure your CPA puts your needs first:

  1. Work with CPAs Who Prioritize You:
     When searching for a small business CPA in Austin or a CPA in Round Rock, TX, ask about their communication process. Do they send regular updates? Are they accessible when you need answers? Clear, consistent communication should be the baseline—not a bonus.

  2. Use Tools That Keep You in the Loop:
     Modern Austin accounting services offer secure portals where you can track your financials, view timelines, and stay connected. If your CPA doesn’t use these tools, you might be missing out on vital information.

  3. Partner with a High-Touch Firm Like Insogna CPA:
     At Insogna CPA, we believe you deserve more than just spreadsheets and tax filings. Unlike many CPA firms Austin, Texas, we focus on proactive, concierge-level communication that keeps you in control of your finances.

Imagine Your Financial Life Without the Stress

Picture this: You know exactly where your business stands financially because your CPA keeps you informed every step of the way. No surprises, no missed deadlines, no scrambling for answers.

That’s what working with Insogna CPA feels like. Whether you’re looking for accounting firms in Austin Texas, evaluating Austin TX CPA firms, or need a trusted partner for Austin’s accounting services, we’re here to redefine your expectations.

Ready to Experience the Difference?

You deserve a CPA who communicates clearly, anticipates your needs, and prioritizes your success. If you’re done settling for poor service from other Austin CPA firms, let’s talk.

Contact Insogna CPA today to see how our proactive approach to communication can simplify your finances and transform your business.

Running a Cross-Border eCommerce Business? Avoid These Costly Accounting Mistakes

Expanding to the U.S. or Canada? Here’s How to Keep Your Finances in Check.

Running a business across the U.S. and Canada sounds exciting until tax season hits, and you realize your books are a mess, your tax bill is a mystery, and your cash flow is all over the place.

Sound familiar? You’re not alone.

Cross-border business owners often juggle different tax laws, separate QuickBooks files, and uncoordinated financial reporting which leads to missed deductions, tax penalties, and cash flow nightmares.

But here’s the good news: You don’t have to figure this out alone.

At Insogna CPA, a leading CPA firm in Austin, Texas, we specialize in helping cross-border businesses simplify their finances, reduce tax liability, and avoid costly mistakes.

Here’s how to avoid the biggest financial pitfalls and set your business up for success.

Why Cross-Border Businesses Struggle with Accounting

Managing finances across two countries isn’t just about sending invoices in a different currency. It means navigating two entirely different tax systems, each with its own rules, deadlines, and compliance requirements.

Here’s where things go wrong:

  • Separate Accounting Systems = Financial Chaos
    Trying to manage U.S. and Canadian finances in two different QuickBooks files leads to disorganized records and inconsistent reporting.
  • Expense Tracking Nightmares
    Not separating S. vs. Canadian transactions correctly means missed tax deductions and IRS/CRA headaches.
  • Double Taxation Risks
    Without expert tax planning, you could end up paying taxes in BOTH countries on the same income.

Sound familiar? Let’s fix it.

3 Key Strategies to Avoid Costly Cross-Border Accounting Mistakes

1. Sync Your Financial Reporting (Because Two QuickBooks Files = Double the Headaches)

The Problem: If your U.S. and Canadian finances aren’t in sync, you’re wasting time tracking down numbers and increasing your risk of errors.

The Solution: Streamline your financials with cloud-based accounting and expert oversight.

  • Integrate QuickBooks Online to manage U.S. and Canadian transactions seamlessly.
  • Standardize financial reporting across both countries for clarity.
  • Work with a CPA in Austin Texas who understands international tax laws.

Pro Tip: A small business CPA in Austin can restructure your accounting system so you have real-time visibility into your cash flow without the confusion.

2. Track U.S. vs. Canadian Expenses Separately (Your Tax Bill Will Thank You)

The Problem: Many business owners mix expenses from both countries, leading to incorrect tax filings and missed deductions.

The Solution: Keep U.S. and Canadian expenses completely separate.

  • Maintain separate bank accounts for U.S. and Canadian operations.
  • Use clear expense categories based on local tax laws to maximize deductions.
  • Track currency exchange rates to avoid financial discrepancies.

Pro Tip: A tax advisor in Austin can help set up a clear expense tracking system so nothing slips through the cracks.

3. Reduce Your Tax Bill with Smart Planning (No More Double Taxation Surprises)

The Problem: Without the right tax strategy, you could be paying unnecessary taxes in both the U.S. and Canada.

The Solution: Work with a cross-border tax expert to make sure you’re only paying what you legally owe.

  • Determine your tax obligations in both countries based on revenue and business presence.
  • Leverage U.S.-Canada tax treaties to avoid double taxation.
  • Structure profit distribution efficiently to reduce overall tax liability.

Pro Tip: A CPA firm in Austin, Texas can help you navigate tax treaties and optimize your tax strategy so you don’t overpay.

Why Work with Insogna CPA?

At Insogna CPA, one of the most trusted CPA firms in Austin, Texas, we specialize in helping cross-border businesses:

  • Ensure compliance with U.S. and Canadian tax laws.
  • Streamline bookkeeping and reporting so your numbers always make sense.
  • Optimize tax strategies to reduce what you owe legally.
  • Improve cash flow management so you always know where your money is going.

Let’s Make Your Cross-Border Finances Work for You

You don’t have to figure this out alone. Cross-border accounting is complicated but we make it easy.

At Insogna CPA, a trusted CPA firm in Austin, Texas, we’ll help you simplify financial reporting, stay compliant, and optimize your tax strategy.

Schedule a consultation today, and let’s set your business up for success!

Drowning in 15,000+ Transactions? Here’s How to Manage High-Volume eCommerce Accounting Without Losing Your Mind

Running an eCommerce business is exciting. Sales are rolling in, your brand is growing, and you’re scaling fast. But let’s be real: keeping up with thousands of transactions across multiple platforms? That’s a whole different beast.

  • Shopify, Amazon, and WooCommerce sales keep piling up.
  • Payment processors (Stripe, PayPal, Square) all have different payout schedules.
  • Returns, refunds, and chargebacks are throwing off your numbers.

And now, tax season is creeping up, and suddenly your books look like a hot mess.

Sound familiar? You’re not alone. Many eCommerce sellers hit this point and realize traditional bookkeeping methods just can’t keep up. The good news? You don’t have to manage this chaos alone.

At Insogna CPA, a trusted Austin, Texas CPA, we help high-volume eCommerce businesses automate their financials, eliminate manual errors, and stay tax-compliant without losing their sanity.

Here’s how you can take back control of your numbers.

Why High-Volume eCommerce Accounting Gets Messy Fast

The more you sell, the more complicated your accounting becomes. Here’s why:

You’re selling across multiple platforms.

  • Shopify, Amazon, WooCommerce, and Etsy each have their own reporting system and payout structure.
  • Trying to reconcile everything manually? Yeah, no thanks.

Payment processors make things complicated.

  • Stripe, PayPal, and Square deduct fees before payouts, but your sales data doesn’t reflect that.
  • If you don’t account for these transaction fees correctly, your revenue numbers will be way off.

Returns, refunds, and chargebacks mess up your numbers.

  • Not tracking how much actually stays in your account leads to overstated profits and tax headaches.

Your books are overloaded.

  • If you’re handling 15,000+ transactions per month, spreadsheets and manual tracking just won’t cut it anymore.

The solution? Automate everything.

How to Manage High-Volume eCommerce Accounting Like a Pro

If you’re dealing with thousands of transactions per month, spreadsheets and manual data entry aren’t going to cut it. Here’s how to set up a scalable system that saves you time, money, and stress.

1. Use the Right Accounting Software & Automation Tools

Why this matters:

  • Automating sales tracking eliminates human error and saves hours of manual work.
  • You get real-time financial insights instead of scrambling at tax time.

Best tools for high-volume eCommerce accounting:

  • QuickBooks Online – The go-to accounting software for seamless multi-platform sales tracking.
  • A2X Accounting – Integrates with Shopify, Amazon, and Etsy to automatically reconcile transactions with QuickBooks.
  • Dext or Hubdoc – Helps capture receipts and expenses

Not sure which tool is right for your business? A small business CPA in Austin can help you choose the best setup and integrate it properly.

2. Streamline QuickBooks Integrations for WooCommerce & Shopify

Trying to manually enter every transaction? Not happening. You need automated integrations to keep your books clean.

How QuickBooks integrations help:

  • Automatically sync sales data from Shopify, Amazon, WooCommerce, or Etsy.
  • Match transactions with bank deposits so your revenue reporting is accurate.
  • Categorize expenses in real time (shipping, ad spend, software fees) so you know your actual profits.

Not sure how to set up QuickBooks for high-volume eCommerce? An Austin tax accountant can customize integrations so everything runs smoothly.

3. Work With a CPA Who Understands High-Volume eCommerce

Even with automation, you need an expert who understands the unique challenges of high-volume eCommerce accounting.

How an eCommerce CPA helps:

  • Ensures your sales, expenses, and cash flow numbers match up (no more guessing!).
  • Helps maximize tax deductions so you’re not overpaying at tax time.
  • Prepares accurate financial reports for investors, lenders, or business scaling.

The result? Less stress, fewer tax surprises, and more time to grow your business.

Let’s Simplify Your eCommerce Accounting So You Can Focus on Growth

Handling 15,000+ transactions doesn’t have to be overwhelming. You just need the right system in place.

At Insogna CPA, we help high-volume eCommerce businesses:
 ✔ Set up automated accounting tools for accurate tracking.
 ✔ Optimize QuickBooks integrations for WooCommerce, Shopify & Amazon.
 ✔ Manage high-transaction financials without the chaos.

Let’s simplify your eCommerce financials. Schedule a consultation with Insogna CPA today!

Whether you need an Austin, TX accountant, a tax advisor in Austin, or an expert from one of the top Austin accounting firms, we’ve got you covered.

E-commerce Taxes 101: What You REALLY Owe (And How to Pay Less)

Running an Amazon, Shopify, or Etsy store is exciting. You’re building something of your own, making sales while you sleep, and scaling up without the overhead of a brick-and-mortar shop. But then tax season hits, and suddenly, it’s not so fun anymore.

“Wait… Do I owe sales tax in every state? What the heck is self-employment tax? And why does it feel like I’m working for the IRS instead of myself?”

We get it. Taxes are confusing, frustrating, and (let’s be honest) kind of the worst. But avoiding them or assuming you’ll “figure it out later” is a surefire way to end up with a massive tax bill or penalties down the road.

At Insogna CPA, a top Austin, Texas CPA firm, we help e-commerce entrepreneurs legally minimize their tax burden, stay compliant, and keep more of what they earn.

Let’s break down what you actually owe and how to make sure you’re not overpaying.

The 3 Taxes Every E-commerce Seller Needs to Know About

Most online sellers think taxes = income tax, but that’s only part of the picture. Here’s the full breakdown:

  • Sales Tax – Collected from customers, remitted to the state.
  • Income Tax – Paid on your profits.
  • Self-Employment Tax – Covers Social Security & Medicare.

Each tax applies differently, depending on where you sell, what you sell, and how your business is structured.

Let’s unpack them one by one.

1. Sales Tax: When and Where Do You Have to Collect It?

Sales tax is not your money. You’re just collecting it for the state and handing it over like a responsible business owner.

Do You Need to Collect Sales Tax?
 ✔ YES, if you have nexus in a state (more on that below).
 ✔ YES, if your revenue exceeds a state’s economic threshold (usually $100K+ in annual sales).
 ✔ YES, if your products are taxable in that state (not all are).

Common Mistake: “I Registered My LLC in Wyoming, So I Only Pay Sales Tax There”
Reality Check:
Your LLC’s location means nothing for sales tax. If your Amazon FBA inventory is sitting in Texas or California, you have nexus in those states and must collect and remit sales tax there.

What You Can Do:

  • Use TaxJar or Avalara to automate sales tax tracking.
  • Work with an Austin tax accountant (like us!) to register in the right states and avoid penalties.

Good News: If you sell through Amazon, Shopify, or Etsy, these platforms collect and remit sales tax for you in some states but not all.

Income Tax: What You Actually Owe on Your Profits

Income tax is what you pay to the IRS and your state on your net business profits.

How Much Will You Pay?

  • Federal Income Tax: Ranges from 10% to 37%, depending on your total income.
  • State Income Tax:
    • If you’re in Texas or Florida, you’re in luck—no state income tax.
    • If you’re in California or New York, expect up to 13% on top of federal taxes.
  • Business Structure Matters:
    • LLCs pay income tax on personal returns.
    • C-Corps pay corporate tax first, then shareholders pay taxes on dividends.

Common Myth: “I Only Pay Taxes When I Withdraw the Money”
Reality Check:
Nope. The IRS taxes your profits, not your withdrawals. Even if you leave every dollar in your business account, you still owe income tax on your earnings.

What You Can Do:

  • Maximize deductions (see below).
  • Consider an S-Corp election if you’re making $50K+ in profit—it can save you thousands.
  • Work with a small business CPA in Austin, Texas to create a proactive tax plan.

Self-Employment Tax: The One That Sneaks Up on New Sellers

If you’re self-employed, you don’t have an employer covering Social Security and Medicare taxes for you. You’re on the hook for both sides.

How Much Is Self-Employment Tax?
15.3% of your net earnings
(ouch).

  • 4% for Social Security
  • 9% for Medicare

Who Pays It?

  • Sole Proprietors & Single-Member LLCs – Pay self-employment tax on all profits.
  • Multi-Member LLCs & Partnerships – Each partner pays self-employment tax on their share of profits.
  • S-Corps – Only pay self-employment tax on your salary, not your entire profit (this is why so many business owners switch to S-Corp status).

Common Myth: “I Can Avoid Self-Employment Tax by Paying Myself in Dividends”
Reality Check:
The IRS requires reasonable compensation if you take an S-Corp election. If you’re running an e-commerce business full-time, paying yourself a $10K salary with $90K in dividends is a huge audit risk.

What You Can Do:

  • Consider an S-Corp election to reduce self-employment tax legally.
  • Use payroll software like Gusto to handle taxes automatically.
  • Talk to a CPA in Austin, Texas to make sure your salary-to-dividend ratio is audit-proof.

Don’t Let Taxes Stress You Out: Plan Ahead & Pay Less

Most e-commerce sellers overpay in taxes simply because they don’t know how to plan ahead. Now you do.

 ✔ Sales Tax – Based on nexus & sales volume, collected from customers.
 ✔ Income Tax – Paid on business profits, even if you don’t withdraw the money.
 ✔ Self-Employment Tax – Covers Social Security & Medicare (but can be reduced with an S-Corp).

At Insogna CPA, a top Austin accounting firm, we help e-commerce sellers:
 ✔ Reduce tax liability with smart deductions & strategies.
 ✔ Stay compliant with sales tax laws to avoid penalties.
 ✔ Optimize business structures (LLC vs. S-Corp) for maximum savings.

Want to stop overpaying? Let’s build a proactive tax plan together—schedule a call with Insogna CPA today!