Posts by cosmictinker24

Quick question regarding an invoice...
We just wrapped up some consulting work for a company based in Canada that happens to have a branch here in the States. They specifically asked us to issue the invoice including sales tax in USD—basically treating it like any other standard domestic B2B transaction. I was actually thinking about handling it the way we usually do for international clients by filing a consolidated report instead... I guess I'm just not sure if that's the right move, or even legally allowed in this situation. Has anyone dealt with this kind of cross-border billing before? I'd really appreciate some insight.

Thanks

Henry Edwards33 said:Look, if you aren't legally required to report something, you don't have to send it in.
You only report what's mandatory. If you decide to start reporting those "optional" bits of income, then you have to be consistent and include everything—like dividends, interest from your savings account, and so on. It’s basically an all-or-nothing deal when it comes to non-mandatory income.

Personally, I don't report my dividends because it just bumps up my tax liability, and besides, they've already been taxed at the source and reported via a W-2 by the payer.

Yeah, exactly. I won't be sending those in either since they're already taxed and the payers have already filed the 1099s... thanks a lot.

Carol Price4 said:Yeah, they do—all income counts...

I’m asking because I read somewhere that it’s just a turnover, some kind of independent contractor setup...
One year, we actually submitted documentation for our royalties, and they didn't even bother to take them into account... so... yeah...

So, do they actually send out confirmation notices regarding interest earned or payouts... specifically for tax reporting purposes on savings accounts?

Quick question? I’ve been paying for this fiscal software because we used to have maybe one or two cash transactions a year, but honestly, last year we didn't have a single one—everything went through our business checking account. What do I actually need to do to stop using this fiscal program? It feels like a total waste of money at this point...
Do I just need to officially decide that we won't be taking any cash payments anymore? Or is there something else required by the IRS?
Thanks for the help

Quick question? When processing a payout—say, for some transportation reimbursement—do I actually need to include a routing number?
Because I feel like I've read conflicting things... one source says yes, but another insists it's a no??

Thanks

Henry Edwards33 said:So, it’s a March bill that got paid in April, but there was an overpayment of $1.00. Did I get that right?
You close out the March bill for the full amount, then you take that $1.00 overpayment and apply it toward the April bill, paying just the difference.

So, I closed out the March statement with $138... (paid 417.00)
But now, the April statement shows $137, though it's been reduced by $1.00, leaving a balance of $136 to pay.
If I pay that $136, but I enter the bill with $137 and mark it as paid at $136, I still have an unpaid balance for $1.00... I guess I just don't see how to carry that over and close it out on the April statement?
Sorry to bug you, I'm just totally lost here...

Henry Edwards33 said:Thanks.

May 15th falls on a Sunday. Should I just date them for the 15th and actually file everything on the 16th?

The issue is the taxes haven't been paid yet, and they won't be settled by May 15th.

Just book the full invoice amount, then apply the payment using only the amount from that $1.00 credit. That’ll leave the remaining balance open, which is exactly what you need to show the outstanding difference you still owe.

The software isn't letting me book the invoice for $138 if I set the payment to 417... it keeps saying the payment total exceeds the invoice amount??

Henry Edwards33 said:What’s the deadline for filing my JOPPD regarding self-employment contributions?🕺

You’ve got until the 15th of the month to file the JOPPD for the previous month's contributions. Honestly, the specific date doesn't matter much, as long as you make sure the payments actually clear by then...

Robin Cook4 said:Which account am I supposed to hit for those monthly income tax prepayments based on my annual filing—the 1430 or the 1619?

1430

So, when we're dealing with pass-through items or incorrect tax designations, should we be booking those "outside of KPIs"?
Up until now, I’ve just been putting together a list of those specific receipts—the ones that don't actually count as income—and submitting them along with the filing...

Charles Turner13 said:Well, invoices are supposed to be issued based on when the business transaction actually occurs. If the goods or services under that pro forma were delivered back in 2007, then the invoice should have been issued in that same year with the 22% sales tax rate applicable at that time. You simply close it out now based on that final payment amount.

Yeah, unfortunately, all we ever did was issue a pro forma...
The actual invoice was never generated back in 2007... that's the whole headache right there. Now that the difference against that old pro forma has been paid, I'm just sitting here staring at the books, not knowing how the hell to close this out properly....

I could really use some guidance here, because I’m honestly at my wit's end with this pro forma invoice from back in 2007. It was issued to an individual, and looking at the books, a partial payment was recorded way back then. Now, the remaining balance has finally been settled—though technically his employer just garnished it through a legal seizure because he was drowning in debt for so long. I have no clue how to properly close out this payment. Do I clear the difference using the old 22% sales tax rate? Or how am I supposed to issue the actual invoice now that the tax rate has jumped to 25%? If I do that, there's going to be a discrepancy in the tax portion... it's enough to drive anyone insane!

Charles Turner13 said:I’ve actually heard something different—my understanding is that everyone, including corporations and small businesses, is required to settle their accounts.
The requirement to liquidate accounts is mandated by the Accounting Act, and even sole proprietors are subject to those same regulations.
Only those operating under the simplified tax regime are exempt from these obligations.

As far as I can gather, this applies to corporate income taxpayers! If anyone actually knows more about this...??

graniterider10 said:If you're running a small business, do you need to stamp the received invoice with a "PAID" mark and the date?

No, that's just for corporations.

Keith Martinez5 said:I honestly can’t make head or tail of this P&L stuff—or whatever they’re calling it these days... whenever I log a deposit into the business checking account, it immediately gets lumped into the difference between turnover and reported receipts, and now I’m just staring at a total mess. It’s like trying to find a single tree in the middle of a massive forest. Is there actually a coherent, step-by-step guide somewhere that explains exactly what goes where and how to input everything properly?

I've looked everywhere, but I couldn't find an explanation either... I'm just as lost as you are...
I've got some cash receipts here, but they weren't deposited into the bank account... yet down below, it lists a cash deposit that was reported under section II.1. How am I even supposed to make sense of that?

Brandon Jackson4 said:On Form P-PPI, you put pass-through items and all non-taxable receipts under section 2.5. For Schedule V, you don't actually enter anything there... the form itself doesn't provide a space for it.

So, I guess... do I actually need to compile a full itemized list of every single one of those deposits hitting the bank account that aren't considered income (those pass-through items), or is just stating the total amount enough? Also, I have this one erroneous wire transfer that was sent back to us. Should I be attaching documentation for that to the IRS, or is it fine if I just list it under 2.5.?

thanks

The following should be attached to the tax return:

Form P-PPI and
Schedule V, which details business receipts and expenditures.

Regarding pass-through items and misapplied credits—should those be recorded under section 2.5, "Other Unspecified Income," since they aren't technically taxable receipts for the P-PPI form? Or maybe they belong somewhere else within this Schedule V for business receipts and expenditures? I guess it's unclear.

Jessica Gonzalez30 said:From what I understand, you only report interest if it's tied to funds being used specifically for business operations—and even then, only if the tax hasn't already been withheld at the source, like interest on a standard checking account for overnight deposits.

Since the bank would have already withheld the tax when they paid out the interest (effectively reducing the payout by that amount), I'm leaning toward thinking this interest shouldn't be included, especially if it isn't interest attributed to capital deployed for actual business activities.

If I've got that wrong, please feel free to set me straight.
I'm just getting a bit lost wading through all this law and regulation 😵

Ugh, I don't even know anymore... apparently, it's just his personal savings!
And then the bank goes and writes this letter telling him to just include it on his annual tax return...🤔
It’s the same story as before; we tried providing the documentation from ASCAP regarding the royalties he received, but the IRS didn't give a damn... they wouldn't even factor that income into his self-employment earnings!!!

My employer (they're a freelance consultant) just got hit with a Statement of Interest Paid from their bank... regarding some interest earned on a savings account they opened back in 2015.
Should this be reported on the annual tax return under 4.4. CAPITAL INCOME, specifically section 4.4.2. INTEREST DATA—meaning both the income itself and the withheld federal tax based on that statement???

Thanks