Posts by Brenda Chase3

You’re overcomplicating the answer. I responded to my colleague based on her specific inquiry, not some "what if" hypothetical scenario. They didn't issue a refund; she clearly stated they applied the credit toward the next invoice, so that’s exactly how I framed my response. If they had actually sent cash back to a customer after five months, you wouldn't even be looking at an invoice—you'd be dealing with a misapplied payment, which you simply reconcile at year-end when filing your taxes by noting the discrepancy in your sales tax forms. That provides clear proof that the money was returned, making it a valid deduction. In her specific example, that isn't the case, which is why I pointed out the proper procedure. You don't need to dance around the truth like a politician; if you know the answer, just give the woman a straight answer. It’s not about being difficult or creating problems; I am simply explaining the correct way to handle things and how it can be rectified retroactively, which I already mentioned.
stormyviper2, you tend to give everyone vague, general answers rather than addressing the specific question at hand. I tend to be the exact opposite.

Just to add a bit more clarity here: if you're operating as a sole proprietor, you're paying sales tax based on when you actually collect the payment. If you haven't seen a refund hit your account, it means you've successfully collected revenue without having issued a corresponding invoice—whether that’s a final bill or a deposit receipt.

urbanwalker72 said:But what is the rationale behind that? Shouldn't accounting entries serve as a true reflection of the actual business transaction? Why label it an advance if that wasn't the original intent? It seems more logical to treat it for what it truly is: an erroneous payment. Even though several months have passed, shouldn't the correct procedure have been to refund the entire incorrect amount and then have the client resubmit the exact payment required?

Where does the notion come from that a tax liability is triggered simply because someone made a clerical error during a transfer? 😁

Establishing a prepayment requires some form of documentation, such as a formal quote, a pro forma invoice, or a similar instrument, none of which seem to exist here. If I am interpreting the situation correctly, there is merely a service contract for monthly consulting fees. There is no mention of an advance, nor any documented reason to trigger a sales tax assessment. One cannot arbitrarily classify this as an advance for a future invoice if that wasn't the intent and if there is no paper trail to support it.

I am certainly not an expert in this field, so I cannot speak to how these matters are typically smoothed over in the industry, but the current logic appears inconsistent and likely inaccurate.

A tax obligation doesn't trigger if the payment was a mistake and the funds are actually returned. The issue here is that they didn't treat this as a mistaken payment to be refunded; instead, they kept the cash and applied it as a credit toward the next invoice. That’s a fundamental distinction, and you can't treat those two scenarios the same way under accounting rules. If they had simply issued a refund immediately, we would be right back where you suggested. But since they held onto the money, there needs to be formal documentation explaining exactly why the customer wasn't reimbursed.

urbanwalker72 said:But what is the rationale behind that? Shouldn't accounting entries serve as a true reflection of the actual business transaction? Why label it an advance if that wasn't the original intent? It seems more logical to treat it for what it truly is: an erroneous payment. Even though several months have passed, shouldn't the correct procedure have been to refund the entire incorrect amount and then have the client resubmit the exact payment required?

Where does the notion come from that a tax liability is triggered simply because someone made a clerical error during a transfer? 😁

Establishing a prepayment requires some form of documentation, such as a formal quote, a pro forma invoice, or a similar instrument, none of which seem to exist here. If I am interpreting the situation correctly, there is merely a service contract for monthly consulting fees. There is no mention of an advance, nor any documented reason to trigger a sales tax assessment. One cannot arbitrarily classify this as an advance for a future invoice if that wasn't the intent and if there is no paper trail to support it.

I am certainly not an expert in this field, so I cannot speak to how these matters are typically smoothed over in the industry, but the current logic appears inconsistent and likely inaccurate.

Since she mentioned they treated it as payment toward the next invoice, the client ended up paying less on that subsequent bill. If that's the case, they really should have issued an invoice for an advance payment, given that they kept money they didn't return and used it to offset the next payment.

cosmictinker24 said:Hey everyone.

I could use some help with this:
What happens if a client overpaid their invoice back in February?
We bill them monthly for our consulting services...
But now, for the March billing, they’ve paid less by that exact amount.
I'm wondering what I should have actually done with that extra credit in February? Since the next invoice hadn't even been generated yet to offset it...

Thanks.

The textbook way to handle this would be to issue a deposit invoice—since, effectively, that's what it is—which gives you a credit to apply. This happens quite often, and if a deposit invoice isn't issued, most accountants simply treat the extra funds as a payment applied to the following month. In your specific case, you would just record that difference paid in February as being applied on March 1st.
Strictly speaking, my first suggestion is the most accurate because you would technically owe sales tax on that advance payment as of February.
That said, in everyday practice, most firms don't make a big deal out of using the second method when these things pop up.

jadefox23 said:Wait, I don't see him anywhere?
So, once I actually hit send, will that attachment finally show up or what?

You won't find it listed in the IRS online portal either. Let me walk you through this step-by-step.😉
It sounds like you might have downloaded a PDF version of the 2018 tax form from a website and filled it out before even logging into the official IRS electronic filing system. If that’s what happened, just save page 8 as a PDF and upload it as an attachment to the return you already submitted via the electronic portal.
Technically, you aren't even required to fill it out or submit it because the IRS already has all your data regarding your specific personal tax credits on file.

Basically, just complete the form through the IRS electronic filing system and submit it. Then, navigate to your "submitted returns." Select the specific form you just sent. You'll see an "attachments" section at the bottom where you can upload whatever you need in PDF format—including that specific document you have saved on your computer. There isn't a separate field for that specific attachment within the standard electronic interface.
Honestly, though, why let this stress you out? It shouldn't be necessary to send. Whether you include it or not, the IRS will process your return based on the information they already have registered in their system.

jadefox23 said:I'm currently navigating through the IRS online portal trying to fill out my tax withholding forms.

Does anyone know where I can find the specific supplemental forms? All I'm seeing on my dashboard is the standard withholding paperwork, but nothing else...

That specific form isn't required anymore. The IRS handles everything automatically based on the data they already have on file for you. That said, if you still feel more comfortable attaching it just to be safe, you're more than welcome to upload it as an attachment.

neonsurfer13 said:Alright, thanks for the tip. But just to be clear, I can still mail in a paper copy if I want to?

Absolutely, you certainly can. We actually just mailed out a package for a small business a few days ago because the taxpayer is located in a different city, and we did the exact same thing last year, so there’s really no issue there. We simply included a note with the supporting documents explaining that everything had already been submitted through the IRS e-file system; however, since the supplemental documentation was so voluminous, we decided to send it all by mail. There were at least 50 different statements to include, and frankly, scanning every single one of them to upload to the portal seemed like a massive headache. Plus, with those strict file size limits—usually capped around 5MB—you'd end up having to send it in a dozen tiny pieces if you went the digital route.

neonsurfer13 said: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.

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.

neonsurfer13 said:All I can find is a two-page thread about the technical side of the Green Party forms.
Is there anything else out there specifically about those Green Party filings?

So, does this mean it has to be submitted by the 20th of the month?

Look, as long as I'm paying my dues to the American Bar Association, fine. But when it comes to sending out critical notices like this, they're nowhere to be found. There isn't a single thing on their website regarding these Green Party forms.

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.

neonsurfer13 said:Just noticed a new service popped up on the IRS website regarding those U-RA forms.
I’m a bit lost—is this some new headache we small business owners are being forced to deal with now?
Does anyone have any actual info on this? Like, what are the deadlines, how do we even file this thing, etc.?

If you're registered for sales tax, then you'll need to file this alongside your regular sales tax returns. There is an entire thread dedicated to this right here on the forum, so it might be worth doing a little reading; there was a much more detailed breakdown posted previously.

Benjamin Phillips75 said:Just doing a quick double-check for this year... If we're talking about paying out those vocational training measures—you know, the fifty-fifty split—does the payment from the U.S. Department of Labor go straight into the contractor's account? Seems like it does to me, but I need a confirmation.

It definitely counts.

Olivia Cruz86 said:Hey there!

I’ve got two totally brain-dead questions for you guys!
I'm trying to wrap my head around how to book incoming invoices—specifically, what’s the deal when I'm buying stuff for an office where we provide professional services versus things that have absolutely nothing to do with the actual business?
Like, think about cleaning supplies, light bulbs, some cheap furniture, professional books, work uniforms, those monthly fees for our accounting software, or just basic office supplies?
For example, let's say I grab something on a retail receipt for the office totaling $42 (100 + sales tax)
. Do I just log this through the expense account as a regular business cost $42 so it doesn't fall under $42 (kind of like how you'd handle utility bills, union dues, or postage)? Or $42 do I record the full invoice amount and then claim the sales tax deduction $8.25?
Thanks a ton for the help!

If those utility bills are issued in the company's name, then you can absolutely claim the sales tax credit; I'm not sure why you mentioned that credits aren't recognized for utilities. The only time you can't claim the credit is if the bills aren't made out to the business.
Office supplies and general equipment are recorded normally, and the sales tax is deductible. It doesn't matter if the nature of your core business is different; the office is a fundamental part of the company and necessary for operations, which means office expenses are fully recognized and the sales tax is deductible.

Olivia Cruz86 said:Hey everyone!
Has anyone actually received—or does anyone know if they’re about to receive—that tax-free bonus (you know, that extra pay bump...) through $1667?
I’m trying to wrap my head around how the paperwork for JPMorgan Chase is going to work—like, when does it all need to be filed, and what’s the actual process for filling out the payment authorization?

Thanks!

https://www.isplate.info/nagrade-za-...a-radnika.aspx

The payment order is handled just like the holiday bonuses; you just use the standard format, but at the end of the account number field, you include 40002-SSN-399.

Kate Ortiz said:Can someone please tell me if I need to grab a certificate as an individual or as a business user for my sole proprietorship?

Sorry if this has already been covered before.

We have several small businesses operating under simplified tax structures, and all their certifications are issued directly to the business entity rather than the individuals themselves. None of them hold certificates in their own names. Since there are quite a few sole proprietors in this group, I’d love for someone to jump in and confirm if my understanding is correct—I want to make sure I'm not leading anyone down the wrong path here.

neonsurfer13 said:I think I get the gist of it, but I want to make sure I'm not totally missing the mark here:

- So, I issue an invoice and charge sales tax, right?
- Does the customer's address (an address in Canada) need to be on the invoice and also match what's on the tax return form?
- Am I the one responsible for printing and filing the tax return form?
- For the field under "VAT REFUND REQUEST," do I put the actual tax amount there?
- Where exactly in the tax form do I enter that tax amount with a negative sign?
- How am I supposed to log this invoice in my sales records versus my general income and expense ledger? What should I be looking out for?

- Yes, you issue a standard invoice inclusive of sales tax.
- Correct, it needs to be in the customer's name with all their full details included.
- For the refund form, you fill out the general information at the top and then complete the table below (listing the price before tax, the tax itself, and the total amount). We also checked the shipping method box—since our client picked up the goods themselves, we selected option 4.1.
- On the tax return, you will record that negative amount under "Subsequent Export Relief for Personal Passenger Traffic"—specifically under Section II. 14. You’ll input both the base amount and the tax as negatives. Also, don't forget to file the supplemental tax form with the IRS. That needs to be submitted alongside your main return so the IRS knows exactly which invoice corresponds to the data entered under Section II.14.
In the tax return, you only perform these steps when you are actually issuing the refund to the customer, not before.
- Regarding the bookkeeping: you record the initial sale in your sales ledger exactly as you issued it. Once you actually issue the refund to the customer, you book that portion as an expense in your journal labeled as a sales tax refund to a customer. However, please double-check this specific part with a pro; we handled this entire process for corporations rather than sole proprietorships, and the accounting systems can differ slightly. Just to be safe, maybe someone else on the forum can confirm or correct me regarding the KPI.

The specific layout and requirements for the Sales Tax refund form are dictated by the official Tax Code. You can locate the necessary documentation on the official websites for the United States Department of the Treasury and the Internal Revenue Service

When a customer doesn't have a permanent residence or a usual place of abode within the United States, the seller is responsible for issuing the Sales Tax refund form. This document is completed in duplicate; the original is handed directly to the buyer, while the seller keeps a copy for their own internal records.

In this Sales Tax form, the seller must clearly itemize the total amount charged, the net price excluding sales tax, the specific amount of sales tax applied, and the final total of the sales tax being refunded to the customer or claimant.

Typically, the seller charges the customer the full purchase price, which includes sales tax. To determine the exact tax portion included in the sale price, the seller calculates it by applying the applicable tax rate to the total value of the goods sold.

A customer is eligible for a refund of the sales tax paid, provided they submit the certified original of the Sales Tax form to the seller within six months of the invoice date. This certified original essentially serves as the formal request for the tax refund.

If the certified original Sales Tax form is sent via mail, the buyer or claimant should include the specific invoice number associated with the sales tax refund. Please note that any transaction or processing fees related to transferring these funds are the responsibility of the buyer.

Once the seller receives the certified Sales Tax form, they will verify whether the claim meets all the necessary legal criteria for a refund. If everything checks out, the seller then proceeds to return the paid sales tax to the customer or claimant.

The refunded sales tax can be returned in U.S. dollars through either a cash payment or a direct deposit into an account specified by the buyer or claimant. If the refund is handled in cash, the seller is required to issue it immediately; however, if the refund is being sent via bank transfer, it must be processed within 15 days of receiving the request.

Upon receiving a cash refund, the buyer or claimant must sign the Sales Tax form to acknowledge receipt of the funds.

To successfully claim a sales tax refund, a buyer leaving the United States is required to present both their receipts and the purchased goods to Customs for inspection, at which point they can have the original Sales Tax form certified.

neonsurfer13 said:I’ve got this customer over in Canada who wants me to ship an item to a post office somewhere near the border, and then he’ll pay for it through the local mail service or at a bank once he's back in the States.
The catch is, he’s asking me for a VAT refund form so he can prove everything at the border and get his sales tax back.
I’ve never dealt with this kind of thing in my life, so I’m completely lost on what the move is here.
Do I actually have to hand over some official paperwork to him, and if so, where am I even supposed to find it?
Does this even affect my own tax filings, or should I just ignore it and treat it like a domestic sale—basically, let him deal with his own business after the transaction is done?

https://lider.media/arhiva/80034/

Everything you need to know is laid out right here. Give it a read, and if any part of it feels fuzzy, just let me know. ;-)

Richard Howard55 said:Thanks a ton for the help, but when you're dealing with someone like me, well... 🤦

I guess I didn't make it clear enough that I was only submitting the update through the Medicare portal, since it was just an employee's home address change.
I was actually kind of surprised that the system automatically suggested the new residential address without me having to type a thing.
The screen said: "Request successfully submitted," followed by the request number, the type of request, and the employee's full name.
So, after your reply, I went back to check the filing history, but nothing showed up.
Then I realized—maybe because I shouldn't have set a specific start date in the search filter. Once I cleared that, a newspaper entry popped up—specifically "-1"—with a little "x" marked in the box: "Filing" instead of "Change." All the data refers to the "historical" filing from February 4, 2013, but the address itself is the new one (the whole reason I was doing this).
Is that... I don't know, "correctly handled" on my end?

That sounds fine. I had the exact same experience; all updates show up under "Enrollment," and there isn't a specific separate tab labeled "Change." So, as long as the information is correct now, you're good to go.

mellowtrucker14 said:The employee changed their home address. Do I need to file an eM-3P form through Social Security, and should I also update their info with Medicare & Medicaid Services?

You don't need to worry about Social Security since they don't require an address at the time of registration. However, you definitely should update Medicare. If you're using the online portal, you can actually handle that change right there—there's a specific section dedicated to updates.