How do I set up so that taxes are removed from my profits at the end of my day for my taxes.

[Duey]

Help.

[TheRealChipA · Accepted solution]

Hi @Duey.  So, I do this using Square automatic savings folders.  However, currently Square doesn’t have a “move sales tax to savings” definition for folders.  We can only set up a percentage of our card sales to be set aside for this purpose.   My work-around for this is as follows.

• My sales tax rate in Kentucky is 6%
• You have to remember that automatic savings only is deducted from card sales, not cash sales.  So you have to add a little fudge factor to account for this.  In my case, I’ve learned over a couple of years that saving 6.5% of my card tenders is enough.  You might need to add 1% if you have more than 25% of your sales completed to cash.

At the end of each month, I transfer my sales tax savings to my bank account to pay my taxes.  Sometimes there is not quite enough, but it is usually +/- $10.  Even then, it is close enough that I don’t mind.  Also, my state gives me a vendor allowance for electronic filing on time, which usually more than makes up for it, anyway.

There is one other option available to you, but this one comes with a cost.  In the Square App Marketplace there are third-party apps that automatically set aside you sales taxes each day and that even file and pay those taxes for you.  If that interests you at all, head to that link and search for sales tax.  A few such apps are Davo and TaxJar.

I hope that helps.  Let me know if you have any other questions.

[Duey · Accepted solution]

Thank you for replying to my question. Where is this square automatic savings folder located on the dashboard?

[TheRealChipA · Accepted solution]

Hi @Duey.  So, I do this using Square automatic savings folders.  However, currently Square doesn’t have a “move sales tax to savings” definition for folders.  We can only set up a percentage of our card sales to be set aside for this purpose.   My work-around for this is as follows.

• My sales tax rate in Kentucky is 6%
• You have to remember that automatic savings only is deducted from card sales, not cash sales.  So you have to add a little fudge factor to account for this.  In my case, I’ve learned over a couple of years that saving 6.5% of my card tenders is enough.  You might need to add 1% if you have more than 25% of your sales completed to cash.

At the end of each month, I transfer my sales tax savings to my bank account to pay my taxes.  Sometimes there is not quite enough, but it is usually +/- $10.  Even then, it is close enough that I don’t mind.  Also, my state gives me a vendor allowance for electronic filing on time, which usually more than makes up for it, anyway.

There is one other option available to you, but this one comes with a cost.  In the Square App Marketplace there are third-party apps that automatically set aside you sales taxes each day and that even file and pay those taxes for you.  If that interests you at all, head to that link and search for sales tax.  A few such apps are Davo and TaxJar.

I hope that helps.  Let me know if you have any other questions.

[Duey · Accepted solution]

Thank you for replying to my question. Where is this square automatic savings folder located on the dashboard?

[TheRealChipA · Accepted solution]

@Duey You have to open a Square Savings account, first.  Here’s some helpful information.

To get started with Square Savings, follow these steps:

1. Sign in to Square Dashboard and go to Banking Balance.
2. Select a business location from Locations.
3. Click the gear icon and select Savings Get started.
4. Verify your business information and complete the setup.

For detailed information, refer to the following articles:

• Set up a savings account
• Manage your savings account