I just started a small car dealership. I'm trying to file the quarterly estimated taxes on my own. If I sell a car for $2,000 with the sales tax included, does that mean that I would include gross sales as $1,841.20? Or is my gross sales the total amount including the sales tax that I charged ?

ANSWER

The BIDaWIZ Team's Answer:

For reporting purposes, you almost always exclude sales tax from the gross receipts amount. Please refer to IRS publication 334. If you collect state and local sales taxes imposed on you as the seller of goods or services from the buyer, you must include the amount collected in gross receipts. If you are required to collect state and local taxes imposed on the buyer and turn them over to state or local governments, you generally do not include these amounts in income.