Posts by David Green642

One more thing—do you guys actually book bank statements that show up after the closing date? Or do you just write them off entirely?

How are you guys handling the column entries when closing out open accounts because a small business just liquidated? Are we talking cash, bank transfer, or an in-kind distribution?

It makes zero sense to list cash or wire transfers—those accounts weren't actually paid, they're just being cleared to shut down the entity. Shouldn't it be recorded as an in-kind distribution? Thanks for the help.

Nicole Lee6 said:Quick question regarding the KPI—which specific column are you guys using to report compensations? Also, I’m debating the accounting side of things here: is it technically correct to book compensation as payment in kind? Or should it be logged as a payment through the clearing account, even if the clearing account hasn't actually seen the transaction yet?

In-kind.

Richard Howard55 said:Just record the invoice and report the sales tax. Exceeding the cash payment limit doesn't suddenly make the receipt invalid, I guess.

Then what's even the point of the limit? It’s still a violation regardless. Better to play it safe than take the risk, right?

I don't know what you're trying to get at here. You just dropped a single word and nothing else—is there a point to this? If you have something to say, just say it. Otherwise, why bother posting? kaže:
Yeah, experiences vary depending on which clerk you get. In my case, I don't even have to bring a physical receipt—they just wait a few days for the payment to clear in the system. Just don't expect that tax refund until everything is fully paid up.

AC Milan says they put the explanation for the correction right there in the notes on the first page of the sales tax form. I actually did the exact same thing once—but the IRS agent insists on a formal written letter instead. Apparently, she "can't see" the note? Seriously? So, what’s the move here? Do we just roll over, do exactly what she wants, and hope she stays off our backs?

It’s a total disaster. Between the complete lack of basic standards and their absolute failure to communicate or organize, I’m catching the brunt of it in my actual work—it's exhausting. I'm wasting time, losing my mind, and constantly having to relearn things just because nothing is streamlined. I’m doing double the work, jumping through unnecessary hoops, and somehow, it’s still never done right. What's the point?

I honestly can't believe how difficult it is for some people to just grab a pen and paper, jot down five basic principles they’re following, and actually pass that info along to the client—or their accountant. It shouldn't be rocket science. Just stick to the rules you set. Is it really that much to ask? Same rules should apply to everyone.

If I were in their shoes, I’d probably just go ahead and draw it myself.

If you ask me, it’s completely unacceptable.

jadenomad24 said:I’m curious how those of you who handle monthly sales tax refunds manage things—do you deal with them as credits or through some kind of clearing account?
For every single transaction, do you actually have to send over a bank statement just to prove the payment went through?
To be honest, I’ve been running into constant headaches with my accountant because of this exact issue.
It’s impossible to tell when she’s actually going to process the sales tax refund.
The way it works is, I finalize a job and pay the invoice, and she immediately sees the liability on the ledger, but the actual payment doesn't show up for another five days. In those cases, I have to send a bank statement, BUT she insists on seeing it the very same day, yet she won't accept the payment order itself—she demands the statement, which isn't even available until the next business day.
I always end up being the one left holding the bag.

I had a similar blowout with an agent recently because she was demanding a full bank statement instead of a simple payment confirmation. You can get the confirmation instantly, but the statement takes time. It's like they've been told they *have* to see the statement specifically, even though it makes zero sense—everything is visible on their system anyway. It makes me feel like an idiot, like they think I don't know the difference between a receipt and a formal statement. It's just pointless.

And don't even get me started on the "transferring VAT credits to other accounts" nonsense. One person tells us we need a formal request and specific orders, so we bring them in, only for them to say, "Nope, that's not how it works." So we try to just list it as a refund in the electronic filing system, then they reject that too. Then we go back to ask, only for a different agent to tell us we need those same requests and orders we were just told weren't necessary. God help us.

David Parker44 said:I just need an option where I don't have to deal with some IRS agent directly.

Well... email is probably your best bet then. Let them "love" you if they need clarification on anything. Under the new rules, they're required to use email anyway, so...

Why the sudden urge to avoid contact?

David Parker44 said:I need to file an amended sales tax return. I sent mine over yesterday, but then I realized I messed up—the software missed one day of total sales. So, if I submit a corrected version today, does the IRS just treat it as a formal amendment to yesterday's filing? Do I need to include some kind of explanatory note or anything? Thanks.

Just send the new, correct version. Everything else depends on which IRS agent you get. For some, a quick email explaining why you're amending and which version is the right one is plenty.

Some folks will just take a phone call.

Others might demand a formal attachment—something written in plain English explaining the error and confirming the updated figures.

And then there are those who don't care at all and just assume the latest filing is the one that counts.

What I want to know is: what's the actual rule here? Is this in the tax code or something? Surely they aren't all just making it up as they go along?

David Green642 said:I’m jumping in here with the same questions—if we're looking at invoices from 2013, how are we even supposed to book those? Are we allowed to input them in this current fiscal year at all? And if we do, do we file a retroactive sales tax return or what?

🙂

Does anyone actually have an answer to that? 🙂

I’m jumping in here with the same questions—if we're looking at invoices from 2013, how are we even supposed to book those? Are we allowed to input them in this current fiscal year at all? And if we do, do we file a retroactive sales tax return or what?

🙂

ruggedmaker2 said:Not sure where this belongs, but maybe someone here could actually use it. It’s pretty straightforward enough:
When the tax liability kicks in

I guess we'll just have to wait and see if those upcoming changes to the Value Added Tax Act actually change anything for us—fingers crossed, I suppose. 😁

thanks Daisy, much appreciated! 😉

Drew Rogers6 said:Wait, what on earth does "free-form request" even mean? I just signed up on the https://www.irs.gov

My head is absolutely spinning looking at all this paperwork I’m supposed to fill out—it’s endless! I’ve got a ton of questions:

1. If one (or maybe a few) of my receipts doesn't follow their specific tax refund guidelines, are they going to reject the whole damn thing or just pick through them selectively?

2. Does every single receipt (like highway tolls) have to have our company name printed right on it?

3. Does the receipt actually need to show their sales tax?

4. For the 2013 tax year, do we need to get everything submitted by September 30th, 2014?

Thanks, 🙂

🙂 We clearly had a misunderstanding; I was talking about the monthly sales tax refund, not the VAT refund system.🙂

ruggedmaker2 said:Look, if the seller lists the sales tax on the invoice, you end up paying it to them. Then, you have to go through the whole headache of filing for a refund through the IRS: http://www.irs.gov/sales-tax-refund-info
Everything you need to know is right there.

Now, if the seller doesn't list their own sales tax because they're passing the tax obligation over to you—which happens—then your business handles both the tax owed and the input credit at the same time. You report it on your tax forms and your acquisition filings. We actually covered this earlier in this thread, so maybe scroll up and give it a read.
(Assuming you're registered for sales tax, anyway.)

You've got the right idea. If you buy a bed from a registered business in another state, that item is taxed here in the US based on our local rates. Since the tax burden is shifted to you, your business owes the tax but also gets the credit simultaneously.
As for how that "tax transfer" language appears on the receipt, that depends entirely on the specific state laws where the seller is located.
Foreign buyers write their invoices according to their own state's rules. They might use a full sentence citing their specific state code, or something vague like "tax-exempt delivery"... it all just depends on whatever their local laws dictate.

🙏🙏

So the bottom line is whether that specific phrase exists on the invoice indicating a transfer of liability; if it does, you handle the sales tax and the deduction simultaneously. If that phrase isn't there and they just list sales tax, you follow the standard VAT-style procedure using our domestic rates?

And the difference being that with the sales tax version, you *have* to file a report, whereas with the other way, you only do it if you want to? If I'm following this correctly...

What does it mean when some people show that transfer of liability and others don't? Probably just that they have the obligation to register for taxes or they don't—if they aren't registered, they can't do the transfer, and if they are, they do.

Michael Kern56 said:Thanks for the reply. I was honestly lost on how to actually request a tax refund because the last time I checked the IRS website, there wasn't even a clear link for it. I tried digging through the online portal, but it was a total dead end. Has anyone here actually successfully navigated this system to get their money back?

We just submit a formal request in a free-form format.

James Phillips38 said:Hello everyone,
I’m looking for some guidance here. In our VAT return, we recorded an acquisition of goods from the USA, and we filed the tax under a partner who isn't actually in the tax database. Honestly, I have no idea how this oversight happened.
The IRS called us asking to provide the entity's ID for verification, but it turns out the ID doesn't exist.
What’s the best way to handle this mess? This was for last month's filing.

Just void the form. If there's no valid ID on the invoice—meaning the database check failed—then that invoice shouldn't even be recorded in the first place.

ruggedmaker2 said:Look, if we're talking about a reverse charge situation, then the tax liability is being shifted directly onto you as the buyer. 😉
Basically, you're acquiring the goods at the applicable rate—which is whatever the US tax code dictates for what you're actually buying, since I don't know your specific business niche—while simultaneously claiming the right to input tax credits. You're essentially handling an intra-USA acquisition and the corresponding input credit at that specific rate. (So, if it's a 25% rate, that info goes straight into sections II.7 and III.7 of your tax forms), and then you file your sales tax returns.

Honestly, just head over to the IRS website. They have the full tax code and regulations posted there, along with a massive pile of official opinions and FAQs. It'll tell you exactly what applies to your specific situation. They also provide incredibly detailed instructions on how to fill out the various tax forms. It tells you step-by-step exactly where every single number goes. 😉

Thanks! So, if I'm looking at an incoming invoice for, say, a bed purchased within the UN, I check the applicable US tax rate because it's a transfer of tax liability—so it's 25% here, and I stick to that?

I get the rest...

That whole "transfer of tax liability" phrase trips me up a bit. Sometimes it's listed on invoices and sometimes it isn't—is it actually required to be stated? I'm talking about invoices for goods acquired within the UN, obviously.

🙂

ruggedmaker2 said:Look, if there’s no sales tax listed on the invoice, it means the tax liability has been shifted onto you. That means you’re on the hook for the tax itself, but you also get the benefit of claiming it as an input credit.
You report that sales tax in your quarterly filings under sections II. 10. and III. 10., plus in the standard sales tax return form

Here’s the guide for the sales tax return

You can find the rest of the instructions right here:
http://www.irs.gov/sales-tax-guidelines

I’m not entirely sure how this works for individual freelancers, but if you’re running an LLC, you’ve gotta book all of this in your formal financial accounting.
Invoice: 4.... / 221...
Sales tax: 1... input credit / 2... sales tax payable (honestly, I don't know which chart of accounts you're using)

You clear out the vendor account once you pay them. As for the input credit in account 1 and the tax payable in account 2, you clear those out using a journal entry at the same time you file your monthly tax return. Basically, by clearing those class 1 and 2 accounts, you’re either showing what you owe the government or showing a credit if you overpaid.
Then, when you actually pay that amount or when the IRS sends you a refund, you clear that obligation or credit using your bank statement as the basis—either when they cut you a check or when they apply it to your account.
If you just show a credit on your return but don't actually ask for a refund or a direct transfer—maybe you just want to leave it as a prepayment—then you just let it sit in the appropriate class 1 account until you actually use it.

One question on this process: if I enter the bill the way you described, do I list the amount as non-taxable, or do I break it down by tax rate? I assume I should break it down by rate so the total tax liability/credit calculates correctly. But what rate am I using? Is it 8%? 10%? What does that depend on? Does it depend on whatever is on the invoice based on US state laws, or...? 😍

Anthony Cruz13 said:Hey there, so here’s my situation. I run a small sole proprietorship for a market stall, and since we aren't registered for sales tax, things are handled a bit differently. Basically, we’ve had some business expenses that we paid for in cash rather than through a bank transfer, but I do have all the receipts to back them up. At the end of the month, it turns out our expenses actually outweighed our income, so those costs are being carried over to the next period. What I’m struggling to wrap my head around is why those expenses I already paid for are being rolled over into the next period if the money is already gone?

How exactly do you think costs "carry over"? If you're talking about the invoices you've already settled, there shouldn't be any carryover. Maybe your bookkeeping is just messy?

Lawrence Clark2 said:Honestly, this whole situation is just pure madness. It feels like every single government agency is busy developing its own separate "must-have" app, leaving us citizens to figure out the mess ourselves...
The level of organization is practically nonexistent, and don't even get me started on the customer support or the impossible deadlines they set...
Poor, disorganized USA.gov

Because you get the wrong people in the wrong seats. These systems should be handled by actual experts, but instead, we've got amateurs running the show. Why? Because political connections matter more than technical skill. So, why act surprised?

Taylor Evans82 said:We're talking about the Chamber of Commerce fees for small business owners who pay corporate tax.

As for the verification thing, everyone at the IRS or local agencies seems to have a different opinion on it, but personally, I’d much rather see the owner or director's signature on the annual filing instead of just some random "sender's" signature. 😉

So, does that mean corporations have to pay the Chamber fee too?

Everything is digital now anyway—you just use an e-signature, so most of this feels redundant. If you're running a service business, your contract already covers the authorization for that kind of verification, right?☕