Posts by Richard Howard55

amberdrifter14 said:It is far better to indulge now and run later than to deny oneself such beauty 😂

legendary !!!! 🙂
I've got to remember her.

Hey! Do you even realize how many calories are in that thing!!!!! 😍

Let's just have one! ☕
A cookie works too!
Who cares about calories anyway! 🤣

Not a single soul in sight! 🙂
Goodnight! 🙂

Halooooo! Anyone else still grinding tonight? 🤣

Maybe we should take a breather and grab a drink together! ☕☕

We filed using those same forms earlier this year. A colleague of mine brought his copies along and mentioned everything went smoothly without any issues.

Carol Price4 said:So I was just thinking—I can't quite wrap my head around this... if my pension is around $0.67, does that mean the standard deduction applies right away to my paycheck? Like, does the difference up to $3,400 get applied immediately, making an extra $0.47 tax-free or something???

No, it works just like any other non-self-employment income (pensions are treated the same way). You can only claim those specific withholdings through one employer at a time. In this scenario, the person decides whether to keep that status with their pension provider or pass it over to their current employer.
Basically, you can only use that standard deduction in one place during the year. Once the year wraps up, you just file your annual income tax return to settle everything up...

Good grief! It’s better when people actually show up! 🙂

What's the catch? Why won't it work?

To all the folks on this forum, and my colleagues too—wishing you nothing but the best this New Year's Day.
🙂

I can't deny there were some brutal days—days so draining that I doubt many people could even sustain that kind of pace, let alone still actually love what they do.

But, I suppose if you stick with it long enough, you eventually build a circle of colleagues. You reach a point where you don't even realize when business associates have turned into actual friends, yet the work still gets done through mutual respect and very little talk.

I still remember how much unconditional support I received when I was first starting out. I especially remember one woman who really "carved" her mark on me; I owe everything I learned about this job to her. Back then, I was green. Like, incredibly green.

That's why I can't just "walk past" someone else's problem. It feels like a way of staying grateful for everything that happened to me along the way.

So, Jessica Grant56, ask whatever you need to ask. I'll give you whatever answers I have, and if I don't know, I'll just say I don't know. We'll keep digging... eventually, someone will turn up with an answer. 🙂

Thanks for the feedback, Jeremy Anderson63!
The amendment to the Value Added Tax law passed, though I haven't seen it hit the Federal Register yet—at least not as of today, based on what I've been checking.
Maybe this sheds some light on those examples you mentioned, especially since they're also changing Article 75, Section 2 of the law.

I’d suggest accepting the response with reservations. It seems like we're just looking at a secondary supplement here, which shouldn't trigger any Value Added Tax obligations.
Otherwise, things are starting to get a bit ridiculous.
Anyway, let me know once you figure out the actual protocol.

I mentioned this in my previous post—probably not very clearly—but there’s actually a specific threshold for taxation on goods. I was referring to both the acquisition threshold and the delivery threshold.

slyfalcon22 said:So, a few days back, some small-time hosts—the kind who pay a flat tax and aren't part of the VAT system—got hit with a notice from Booking.com. Apparently, starting July 1st, they’re supposedly responsible for calculating and paying American VAT on those commission invoices sent over by Booking.com (and other foreign companies that don't have an American footprint). They mentioned that little guys who aren't currently in the VAT system can actually apply for limited VAT registration, which sounds like a total mystery because my local IRS office hasn't heard a single word about it. If anyone out there actually understands why a private host would be on the hook for VAT on Booking.com's fees—especially when they're just paying a flat tax and aren't even in the VAT system—could you please walk me through it? And does this limited VAT registration thing actually exist?

There is a "limited VAT registration," if you want to call it that, though it isn't an official term.
It comes up when a taxpayer—and we're all taxpayers if we're running any kind of business, whether it's registered (like a corporation or a sole proprietorship) or unregistered (like renting out your own property)—engages in transactions with the European Union, meaning one party provides or receives a service.
See, goods have a taxation threshold that protects small taxpayers from entering the VAT system if they stay below it, but services don't have that luxury.
On the other hand, for the "matching" system within the European Union (VIES) to work when thresholds don't apply to services, there needs to be an "echo" on both sides (one country provides the service, the other receives it). That's why situations like yours happen, where you have to register for VAT on a limited basis. You aren't a full-scale taxpayer (you're still technically outside the system), but because of that "echo," you just need to submit the ZP form and the VAT form to the IRS during the months you receive such an invoice.
If you were the one issuing the invoice (the reverse scenario), you'd just submit the VAT form and the ZP form to the IRS in those specific months.
Honestly, I hadn't even considered that this could affect you guys on the flat tax. So, yeah, check it out yourself, and maybe someone else on the forum can weigh in if I'm right about this being a general rule for taxing services and how it hits flat-tax payers.
The IRS bases this on Article 75, Paragraph 1, Point 6, and Article 77, Paragraph 5 of the VAT law.

On paper, at least when you look at the billing... 😍

Henry Edwards33 said:Fair questions. Personally, I record exchange rate differences on the day the payment hits because anything else is just extra paperwork for nothing. I didn't do it that way before, and I'm not starting now—I have no intention of keeping customer accounts open indefinitely over some tiny amount of change. The same goes if they pay more due to a favorable rate. That extra cash is real revenue, and I need to report it somewhere. 🤷

I’m not even going to touch the part about you digging through IRA records; that’s a whole different rabbit hole, and honestly, it shouldn't have been a topic to begin with. You just close out the issued IRA for the full amount, and then the exchange differences are handled separately as either income or an expense 😉
Looking at your situation, you had an export, and now you've got a shipment worth, say, $167. You actually collected $166. Previously, under tax-exempt exports, you should have listed $167, while putting the differences into the KPI.

If I've missed something, please set me straight. My ego can handle the correction 😬

One more thing—don't take everything you read on this Forum as gospel. Always double-check the facts with a pro 😉

Thanks to all the great people helping out here. I've learned a lot from you guys.

Edit:

That’s spot on, though I think our real struggle is figuring out how to actually execute it in the software.
Thinking it through, here is my logic 😁
If $498 landed in your account, that’s what you have to recognize as income, and that specific amount needs to show up in your KPI. Right?
You get that figure by closing out the customer's invoice for $167 (since they paid exactly that and you aren't going to chase them for $0.67 differences) and then you plug those $0.67 into the KPI as an expense. Long story short: the customer account is cleared in full, and you’ve recognized exactly $166. You just ran it through your accounting software in a way that generated an exchange difference. It’s the same with positive differences. If you received $167, you still have to account for that extra $2.00 somehow. You close the customer account for $167, and put the $2.00 in the KPI as income because, following cash principles, you actually collected $167, not $500.00. I think I might have just confused myself 🤔

You think you've tangled things up, but that's just how I've always done it! 😁
Even if it is messy, it seems perfectly logical to me to reduce collections down to basic cash basis accounting.
I haven't dealt with a VAT calculation case personally (everything was export services, which are exempt from VAT). But even if I had, I’d keep doing it this way, because it isn't impossible to run the exchange difference through the IRA (+ or -) and close out the payment.
(Original invoice + exchange difference = cash basis, and the government gets its VAT).

stormyhound3 said:So, I've got this hotel bill from an Italian place for a stay. It’s billed to our US company and we paid via American Express. Total comes to $130 or so, including their 10% sales tax. Which box on the tax form am I supposed to put this in? Thanks!

Nowhere. It doesn't belong on any tax filings.

I briefly considered bringing up Intrastat, but I didn't want to derail the thread.
Since it’s already on the table, though, I have to mention how much the whole process has bothered me from day one.
---> And look, setting aside the approval issues we're currently debating—let's say everything goes perfectly with the filings: how am I even supposed to reconcile the data when Intrastat insists on using the exchange rate from the first day of the month?
Even if you're just comparing USD to USD, the numbers don't line up when you try to match the VAT filings with the Intrastat reports.
---> Also, a separate question unrelated to our VAT discussion: if we handle a shipment where we are the supplier and another US state is the recipient, what happens if we fail to use the correct product codes (the nomenclature)?

Nicole Lee6 said:Your logic holds water. In fact, some folks over in neighboring states started implementing a system earlier this year where corrections to previously filed Zillow reports (how they handle the sales tax side, I'm not sure) are processed in the current month when the triggering event occurs. For instance, if you issue an invoice in July and include it in that Zillow report, but then the client asks for a discount which you approve in November, you simply report the correction in your November Zillow filing. They even added specific fields at the bottom of the form to account for adjustments to previous periods.

But unfortunately, our lawmakers here in the US didn't anticipate that. Instead, if there's any change to the data or amounts reported in a prior period, you're forced to file a whole new sales tax return AND a new Zillow report for that specific period. Since the "services provided to the USA" field on the tax return and the total on the Zillow report have to match perfectly, you end up having to fix both forms for the original month. This means you could potentially find yourself resubmitting the sales tax return and Zillow report for July ten different times if, say, you issued invoices to various international clients who all request different discounts or cash discounts at different later dates. If you catch my drift... 🤔

So, until they fix the legislation, it's a complete mess.

Reading this, another scenario just hit me. What if you aren't approving a single invoice from last month, but instead you're granting a massive annual rebate based on the total turnover for the entire year?
How would we even adjust the forms? Are we really expected to calculate exactly how much of that annual rebate belongs to each individual month and then go back and correct all twelve ZP forms? (And it's the same nightmare with the VAT filings).

Personally, I think I'll just recognize approved or received credits based on the date they were actually issued. I'll report them in the current month and leave the old forms alone.

The whole drama regarding matching ZP and VAT forms with the European Union seems pretty overstated to me, based on a few obvious points:
---> Not everyone in the European Union uses the same currency for reporting, so we can't exactly
compare apples to apples.
---> This means there should be some built-in margin for error when trying to match these figures across different countries on a monthly basis.
---> Otherwise, I'm basically just giving myself permission to deal with a mountain of pointless bureaucracy. Why impose such rigid rules on myself for zero actual benefit? It would just screw me over and make life harder for the agents at the tax authorities, who are already buried under enough new laws and changes as it is—just like I am.

ruggedmaker2 said:I’m still holding out hope that the U.S. Department of the Treasury will actually step up, say something, and clear up this whole mess. Maybe once they finish processing the filings for July, August, September, and October... they'll finally realize how much of a headache this is causing everyone on the ground and give us some actual clarity.
🤷

I’m hoping they come out with something actually intelligent, though I wouldn't hold my breath.
My skepticism stems from this one bit of nonsense we haven't even tackled yet, but we will soon: according to the regulations (Section 200), the VAT return is supposed to cover the entire 2013 fiscal year.
In other words, the regulation for the law that kicks in on July 1st somehow dictates rules for the part of the year when that law didn't even exist—back when a completely different law and set of regulations were in play (not to mention different forms and filing procedures, obviously).

Technically, we could file both versions of the VAT return—one for each distinct period—and the IRS could process them both (meaning, we e-file them and they just accept them) resulting in the exact same tax owed or refund due.
I'm dying to see how they handle that logic. I keep calling consultants to get their take, but even their opinions aren't particularly coherent; everyone is just sitting around waiting for official guidance. At this rate, we won't even need to think anymore; we'll just be blindly following orders. 🙂

Carol Price4 said:From what I gathered, you need to list both Section 90(2) and Section 17(1)—🤷
Section 17(1) covers the transfer of tax liability, while Section 90(2) handles the actual exemption.

Just look at that last sentence...

Fine. Writing the text on an invoice is easy enough. But I wasn't suggesting it was weird; I was talking about the scenario where someone who isn't even in the VAT system ends up filing a VAT return and a consolidated report.

Henry Edwards33 said:I will. If or when I hear anything at all. 🤣

If anyone knows... 🙂

🤷
What part is tripping you up? Drop the link so we can wrap our heads around it together. 😉

If they didn't have a Tax ID, they were supposed to pay the tax upfront. It wouldn't make sense to try and report it as a tax-free acquisition on the pdv-obrazac because, technically, you didn't have the legal standing to process it that way at the moment of the transaction.
Personally, I’d pick up the phone and talk to them to get the records synced up. You don't want a mismatch where the acquisition shows up on one side but not the other. I’d ask them to just issue a corrected invoice.

So, Carol Price4 found it and posted the link. Check response number 18.

My eyes nearly popped out of my head when I read that interpretation.

Apparently, an entrepreneur who isn't even registered for sales tax will still have to file a sales tax return and a summary report during the months they provide services within the USA.
Instead of just citing a specific code on the invoice, they'll have to write out the full text and the article explaining the exemption.

Isn't that bizarre? 😕