Taxjar Blog How To File

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It can be difficult to manage sales tax.

With stacks of paperwork, hefty amounts of calculations, and lots of challenging obstacles, it’s no wonder why sales tax compliance is one of the most difficult business processes. You may be surprised to learn that there is an easier way around it. Introducing TaxJar, the cloud-based state-of-the-art automatic sales tax platform.

With TaxJar, all the challenges in sales tax are simplified, giving you and your business the upper hand. This review will cover all aspects of this service. We’ll also share with you the pros and cons, and our final thoughts about whether or not TaxJar is worth adding to your business management ecosystem. Let’s go!

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For those of you who prefer a more visual experience, here is a video review from Marcus Stonelius’ YouTube channel. To get a comprehensive overview of TaxJar, you may still want to check out our article below.

What does TaxJar do? Taxjar Blog How To File

Since its inception in 2013, TaxJar serves business enterprises and online sellers, intending to ease the already complicated process of sales tax compliance. There are over 11,000 tax jurisdictions in the United States. Each one has its own rules and regulations. Back then, businesses had to comply with sales tax regulations and rates according to where their transactions were held, where their inventory stocks were located, and how many employees they had hired.

This process may appear simple on a surface level, but in reality, it’s quite complicated. Businesses were tasked with handling varying degrees of tax burdens, and these may vary based on varying factors. The US Supreme Court in 2018 ruled that all businesses have to pay sales tax regardless of where the product was purchased. This resulted in more burdens for business owners, having to learn and memorize tax codes upon tax codes on top of everything else.

That’s quite a task. TaxJar simplifies the complex tasks of sales tax compliance and makes them simpler. That way, you can prioritize what matters the most with your business, without the added hassles of hefty tax computation.

What are its Pros and Cons

To help you weigh in on your decision, we’ve provided you with a list of pros and cons of using TaxJar as a business tool. Taxjar Blog How To File

Pros

  • TaxJar has been designed to be simple, quick, and automated. It will keep you in compliance for more than 11,000 tax jurisdictions across the U.S.
  • The AutoFile tool will take care of all the details for you.
  • Using TaxJar for sales tax compliance saves you more time compared to filing everything manually, giving you the chance to focus more on your business.
  • It is easy to use, and you don’t have to be an accountant or tax expert to understand it!
  • Aside from its less tedious nature, TaxJar also provides businesses with amazing customer support and plenty of helpful resources to guide you through when it comes to sales tax compliance!

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Cons

  • Although TaxJar is known to be generally convenient, it may be a bit complicated on the first try, especially for the uninitiated merchant.
  • The interface can also sometimes be inconvenient, as some users have reported cases of having more than five browser tabs open just to file one state’s tax return.
  • The pricing of lower-tier plans can vary based on factors such as additional AutoFile fees if you’ve used up the free credits allowed in a plan – more on that as we’ll discuss the pricing shortly.

How Much Does TaxJar Cost?

TaxJar offers three pricing options: Premium, Professional, or Starter. Let’s take a deeper look at these subscription tiers.

Starter

The Starter plan starts at $19/month and provides essential sales tax services to small businesses. It usually handles up to 200 total purchase and returns orders per month, but the price may change if the volume goes past the number. This tier provides free tools that will help you greatly with sales tax compliance such as sales tax reporting, AI driven product taxability recommendations and basic CSV imports.

Customers also get data integrations and up to four free AutoFiles per annum. Starter also allows for support for multiple business accounts and e-mail support.

For professionals

More challenges are likely to come if your company has more experience and a wider reach. The Professional plan is for you. Starting at $99/month, you get all the features from the Starter tier, plus some upgrades like full API access, advanced CSV imports, and economic nexus features.

Professional includes an increased limit on data import and API integration, from 3 to 10,10,000 advanced API calls per hour, up to 10 team managers users, and 12 free AutoFiles per calendar year. If you use TaxJar Professional and manage to rake up to over 1,000 orders, you’re entitled to phone customer support on top of e-mail support. If you receive more than 200 orders, the price for this tier could change.

Premium

With TaxJar Premium, you get all the features you could ask for when it comes to sales tax compliance and much more. Premium includes all the Starter and Professional features for enterprises and experienced businesses, as well as unlimited API and data integrations to many e-commerce services and unlimited AutoFiles. There is also unlimited team usage.

It also includes increased API calls per minute at 25,000, as well as white-glove support in the form of a dedicated account management team. Unlike the two previous plans, Premium does not have a definite price range. It is fully customizable to meet your business’s needs and can be negotiated through TaxJar’s customer support.

Try it Free of Charge

TaxJar is worth a free 30-day trial. You can get full access to all the Professional plan features and tools, including API access and integrations, data imports, and team and user management. You don’t need to pay upfront to access this trial! Taxjar Blog How To File

Taxjar Blog How To File

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The Features of TaxJar

Automatic Sales Tax Calculations

TaxJar offers fully optimized functions and services that are designed to reduce the tax burden. One of those is its calculation process. TaxJar instantly calculates sales tax! Not only does it always ensure you the right rates in correspondence with your customer’s address and tax jurisdiction, but it also gives you the amounts in real-time.

TaxJar makes it easy to quickly calculate taxes and keep up with changes. Its team keeps track of all updates related to sales tax laws and rates and incorporates them into the platform periodically.

TaxJar Report

TaxJar provides more than just top-notch calculations. It also offers automated reports that include sales tax data from linked accounts, CSV imports and individual state sales tax reports. All of this data is automatically combined into reports for different states with breakdowns according to their tax jurisdictions.

TaxJar makes it easier and more accessible to organize reports. Everything is centralized, which allows for faster collaborations with your finance department. Its reporting dashboard lets you see in-depth analysis based on your recent activity. TaxJar automatically collects data so you’re always up to date.

AutoFile

AutoFile makes this platform stand out among the rest. It’s an electronic sales tax filing tool that gathers user information from e-commerce providers and files them into an automated sales tax return report and payment to be submitted to any state.

AutoFile’s greatest asset is the fact that you are guaranteed to not miss a deadline. There’s no need to even go through the stress of paperwork or extra hands, as it’s designed to be easily manageable. It saves time and money in the long-term.

However, while it looks astoundingly impressive, it’s worth mentioning that it can be quite like a limited luxury to lower-tier subscribers. For starter plan subscribers, you can only get 4 AutoFile enrollments free of charge per year.

Sales Tax Nexus Insights

If you use TaxJar in selling your items online, it’s important to know a thing about economic nexus. This topic has been covered briefly before. However, to sum up, rather than paying sales tax in your home state, customers will be required to pay sales tax in the states where they purchased your products. Taxjar Blog How To File

Determining the nexus can be confusing. TaxJar offers easy-to-understand insights that will help you stay on track. The economic nexus dashboard doesn’t just let you check activity between states but also lets you know if you’ve reached the required nexus threshold for each state. This is especially useful if you have a growing business that wants to expand into more states.

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Integrations with Online Business Services

TaxJar can seamlessly integrate with many online business services. To determine sales tax, you can connect your account with online marketplaces such as Amazon, Etsy and eBay. Integrations can be made with e-commerce platforms such as Shopify, BigCommerce and other similar services that allow you to sell your listings, use payment gateways such as Stripe or PayPal, and operate management systems like Oracle NetSuite, Intuit QuickBooks and many more.

Square, WooCommerce, Walmart, Salesforce and Magento are just a few of the other services that can be integrated with TaxJar. If you can’t find your preferred online business solution in the list, you can always build your own with the TaxJar API, or by importing all data from third-party services through CSV.

Is TaxJar the Perfect Fit for Your Business?

TaxJar has been a reliable and high-tech solution that addresses most of the issues business owners have in managing sales tax. It is a popular choice because it is easy to use, it saves time, and it can help your business in many other ways.

It’s highly recommended, and we are right to be so. However, it isn’t perfect in every aspect. Some users reported having problems with customization, while others found issues with TaxJar’s integration with some apps like Shopify. There have also been problems with automated calculation as well as interface misunderstandings. These issues could be addressed.

Issues aside, if we answered the question “Is TaxJar the perfect fit for your business?” it would be a resounding YES! We highly recommend you try this out as part of your business strategy!

Most Frequently Asked Questions Taxjar Blog How To File

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What types of businesses use TaxJar

TaxJar can be used by small and medium businesses, large-scale enterprises, and even freelancers. TaxJar served more than 20,000 businesses as of 2022. This includes some well-known companies like Coca-Cola and Land Rover, Microsoft, Shein and many other.

Is TaxJar available in countries other than the U.S.

As of recently most of TaxJar’s features are limited to the United States. They are not yet available in other countries. Only the TaxJar API tool is supported in a few non-US territories. Businesses in Canada, Australia, the UK, and countries included in European Union can use TaxJar API.

Can I cancel my TaxJar account? How can I cancel my TaxJar account?

If you are unhappy with TaxJar’s service, you can cancel it by going to your account settings. Once you head over to Plans & Billings, you can click the red link that leads you to cancel your current subscription.

You will lose access to TaxJar’s reporting tools and AutoFile. You can reactivate or cancel your subscription at any time if you want to gain access to these services.

What are the alternatives to TaxJar?

TaxJar isn’t the only sales tax compliance solution available. There are many other options, some with better features, compatibility with more countries, and some with lower price ranges. The following are alternatives to TaxJar.

  • Avalara
  • Sovos Taxify
  • Vertex
  • TaxCloud

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