If you're a small business owner registered for sales tax, you're required to put the R2 code on your invoice along with the note "Tax calculated on cash basis." But what happens when I need to send out an invoice that gives the client, say, a 30-day window to pay? It’s always the same story with these government contracts. I have to issue the invoice first just to get that 30-day countdown started. The problem is, the payment hasn't actually hit my account yet, but the invoice is already out the door. How am I supposed to follow the rules and include that specific note without running into a legal headache?
Does anyone actually know how the tax refund process works when a customer from Canada comes by to pick up their order in person? They need that specific form to get everything stamped at the border. Once I get that form back verified, am I supposed to refund them the full amount of the sales tax, or what? Because if I do, the $10 fee just to wire the money over to their account in Canada eats my lunch.
I stumbled upon some recent articles on this topic. Honestly, I ended up getting a bit lost in all the fine print, but figured I’d drop them here in case anyone else wants to dive into the weeds.
Emily Myers8 said:If you're using your own car for work stuff, just make sure you file those mileage logs. When you turn in your expense reports at the end of the month, you can get reimbursed for using your personal vehicle for business.
I’m telling you, it’s incredibly confusing because one person tells me one thing, and someone else tells me the exact opposite. One accountant told me it was totally fine to use my personal car and just write off 50% of the gas and 100% of the registration and insurance. Then I reached out to AECOM for clarification, and they told me there's no way to claim vehicle expenses unless the car is listed as a long-term asset—which basically means the car has to be owned by the company, not me personally. The accountant swears up and down that AECOM is wrong... so now I'm stuck in the middle.
All I want is to make sure I don't screw this up and end up getting hit with a massive fine from the IRS.
Alright, thanks. Honestly, this whole thing feels way too complicated. I feel like I’ve only managed to learn about 1% more than I knew before I started reading this.
As a small business owner, I’ve just been using my family car this whole time, and I haven't claimed a single cent of those expenses. That’s why I’m trying to figure out the smartest way to actually start deducting some of these costs, but instead, I’m just more lost than when I started.
So, I called up a buddy of mine yesterday who works for this massive corporation—we're talking hundreds of employees, huge scale stuff. He’s one of those guys who gets a company car available to him 24/7. The vehicle is registered to the firm, so he uses it for work, obviously, but he also uses it for pretty much everything else in his personal life. He says there isn't even any paperwork involved. He can use the car for whatever he wants, even driving it out of state, and anyone in his family can take the wheel too. Apparently, they have other employees who use cars daily and actually have to file travel logs and expense reports, but he basically has unlimited access without the headache. The company gives him a small monthly stipend—just a few hundred bucks to cover some basic costs—and he covers the rest of the expenses himself.
Anyway, that's the situation. Now I'm wondering how I can pull the same stunt and use my company's car for personal use, just like he does.
Emily Myers8 said:If there’s no mileage log or paperwork to back up those trips, the vehicle can be pulled from the road and the owner could face some serious trouble. Check out this link from the IRS for more info: https://www.irs.gov/newsroom/publication-details
Quincy:
Is there any way to just skip the whole mileage log thing and just claim 50% of the gas, registration, and depreciation instead?
Nope.
Quincy:
My main goal is just buying the car through the company so it counts as an expense and I can write off at least half the sales tax, but still being able to use it personally without... worrying someone will call me out on the street for using a company vehicle for personal errands if it's registered to the business.
You basically answered your own question—the kind of loophole you're looking for doesn't exist anymore.
Fine, but then explain how people actually do it. I know guys who take a company car and use it for whatever they want, 24/7, even though it's registered to the business. There's zero paperwork. A guy I know told me he gets about $167 a month from his employer for gas, and if he goes over that, he just pays out of pocket. No logs, no nothing. He drives that company rig wherever he damn well pleases.
Emily Myers8 said:Basically, a deductible expense is only one that’s actually necessary for doing business. You need a travel voucher to justify any reimbursements, and those payouts have to be logged via a JOPPD form when you file with the IRS. Is it really that hard to fill out a travel voucher and make sure everything's accounted for?
Alright, so I get it—fuel and tolls are deductible when you're using the car for business trips or client meetings. That part is easy. But what about when employees use those cars for personal stuff? Like I said before, I don't see how employees who get company cars for 24-hour shifts manage this. They probably only use them for work part of the day. There's no way they're filling out a formal travel log for every single grocery run or weekend trip, right?
Is there any way to just scrap the whole travel voucher headache and instead just claim 50% of the fuel, registration, and depreciation costs?
My main goal is just to buy the vehicle under the company name so it counts as a business expense and I can write off at least half the sales tax. But I want the freedom to use it personally without some auditor breathing down my neck or claiming I'm misusing company property if the car is registered to the business.
I need a car for my small business—just a regular sedan, nothing crazy like a van—but I’m stuck on the logistics. Should I register it under my LLC or just keep it in my own name? It’d be ideal to buy it through the business so I can take advantage of that 12.5% sales tax credit and write off the expenses. Honestly, I could really use the tax break right now. The catch is, I want to use it for personal stuff too. I always hear about people at big corporations getting company cars they can drive 24/7. It’s clearly not just for business trips if they're using it for everything, yet the car stays on the company books. So, how do I pull this off? How can I buy a car through my company and use it for both work and life without having to deal with the headache of logging every single mile or filling out endless mileage logs?
Can a small business owner take a split payment for a single item? Like, if the customer wants to pay part of it via direct transfer and then put the rest on their credit card using an installment plan? If I remember correctly, you'd probably have to issue two separate receipts—one official one for the tax man and one non-fiscally registered one. But is it actually legal to have one single purchase for one product split across two different receipts?
So, I’ve run into a bit of a mess. I bought some stuff from a company over in the European Union, but they slapped a 25% sales tax on my bill. Since they have an American tax ID, I guess they think they're legally allowed to charge me that much.
Also, just a heads-up: I used my personal credit card for this, even though the invoice was made out to my business. Should I just mark this down as a cash payment?
How am I supposed to log an invoice like this in my books? What category of accounts payable does this actually fall under?
Is there any way to dodge paying sales tax to a domestic supplier if the goods coming through my business are just being shipped straight out to another country in the European Union?
If it’s possible, what’s the actual process for pulling that off? Thanks
Does anyone know the right way to handle a sale to a customer in Canada when it comes to customs paperwork? Specifically, I’ve got a business entity over in Canada buying goods from my company. They’ll pay upfront, and based on their tax ID, I'll be issuing an invoice without sales tax. The buyer is actually coming here to pick up the goods themselves and drive them across the border into Canada. Am I going to run into any extra costs regarding this, and what specific export documentation do I need to prep for them to get the goods into Canada?
Can someone please walk me through how I actually go about selling long-term assets? Honestly, all I need to know right now is if I need to attach any extra paperwork to this sale immediately, or if I just issue an invoice like I would for any other merchandise and call it a day. Does everything else just get sorted out later on my annual tax return using the standard IRS forms?
I haven't actually dealt with selling long-term assets yet, so I'm wondering if there are any legal hurdles if I decide to sell something for more than its current value listed on the IRS forms?
Quick question about partial credit memos. Last month, I put two items on one invoice because the customer paid for both upfront, but I won't actually ship the second item until this month. When I finally go to ship that second part, am I supposed to issue a credit memo for just that portion of the bill? Does anyone have a solid example of how to actually pull that off in the system?
Brenda Chase3 said:You can attach a mountain of documentation without any issues. In our experience, we’ve had to attach piles of bank statements ourselves. Once you've submitted your DOH, just head over to the "view submitted forms" section and locate the specific filing you just sent. From there, click the little arrow next to it, and you'll see an option labeled "attachments" at the end. Click on that, and you'll find a way to submit whatever files you need at the bottom. So, there's no need to do anything manually; you can handle everything right through the portal.
Alright, thanks for the tip. But just to be clear, I can still mail in a paper copy if I want to?
Can I still file my DOH forms on paper, or am I stuck using the IRS portal exclusively? I'm asking because I have some supporting documents I need to include, but I can't find any way to upload a PDF through the IRS site. Under the attached documents section, there's an "Other" option, but clicking it doesn't trigger any upload window. I have no idea what that button is even supposed to do.
I’m stuck in a situation where I need to void part of an invoice or the whole thing, and honestly, I have no clue how to handle it. Basically, a customer paid me last month for two different items. One item is sitting in my inventory ready to go, but the other one—which also had a shipping charge attached to it—is totally out of stock. Since I can't fulfill that second part of the order, the customer wants to back out of that specific purchase, so I need to get their money back. Here’s the headache: I need to cancel the invoice, but I still intend to charge them for the shipping since they're still getting that first item from the other order. So, what's the move? Do I just issue a full credit memo for the entire invoice and then send over a brand-new invoice just for the shipping fee, or is there a better way to do this?
Either way, I definitely need to void the original invoice and the entry for that second item, mostly because I need a fresh invoice to keep the warranty dates accurate.
Brenda Chase3 said:The Republican Party form basically mirrors the sales tax filings; it lists every single input invoice used to claim credit for input tax. This gives the IRS a clear view of which specific invoices you used to deduct taxes, identifying the suppliers by their EIN, the exact amounts, and so on. Your accountant should have been briefed on this, but if you aren't working with one, you have to stay informed through various seminars and professional journals, just like we accountants do. Boeing actually released an update on this in their Associated Press section back on January 8, 2019.
Alright, thanks... by the way, I handle my own books. So, from what I gather, this only applies to domestic invoices—meaning stuff from suppliers right here in the States, right?