Posts by Nicole Lee6

The whole fiscalization process is tied directly to the owner's Social Security number, which is why those sequences have to reset back to 1. It also means you’ll be stuck dealing with the IRS to generate a brand-new fiscal certificate, which you'll then have to manually integrate into your software solutions. I’m facing the exact same headache over here, though my situation is a bit more complicated since I'm currently managing a business succession plan ahead of my retirement....

Thomas Diaz8 said:Thank you. So, if I am understanding this correctly: my total invoice amount is $1833, but I have only paid $1823, which effectively settles the account, while I record the difference as a bank fee under expenses. Hmm, though I suppose I’ll run into issues with the sales tax deduction... Also, one more thing: if I sell Euros to the bank, I’m going to end up with less cash than what was actually due on the bill. When I transfer that money into my US dollar account, should I be booking that discrepancy as negative interest in my expense reports?

I just leave the Euros sitting in the account, then book the bank fee as an expense (you just take the fee amount listed on the bank's payment notification and attach that to your entry). You close the account entirely; in your specific case, you'd be closing it with $1833.

I calculate what that Euro amount was worth in USD based on the Federal Reserve's mid-market exchange rate on the day the invoice was issued (in your case, $1833).
Then, I calculate what that Euro amount was worth in USD on the actual day the payment was made (again, using the Federal Reserve mid-market rate). I book the difference between those two amounts as positive or negative foreign exchange gains/losses. I always run this through the checking account receipts so that my KPI matches exactly what the IRS will see from the bank at the end of the year.

Selling Euros for USD and any resulting fluctuations aren't recorded anywhere in the KPI. Instead, I list the final USD amount from that currency exchange as an "off-book" receipt. This is just to reconcile the total funds that hit the checking account against what was actually entered in the KPI as income. You don't put the sale itself into the KPI because you already accounted for that income when you closed out your outgoing account via the Euro payment.

Brenda Chase3 said:Article 139, Paragraph 3 of the VAT Act states that you must include the phrase "calculation based on collected fees," but it doesn't explicitly mandate citing the specific article number. From what I understand, the R-2 requirement was phased out starting January 1, 2015, but that 2013 Regulation is still floating around everywhere claiming it's necessary. I can't seem to track down the updated VAT regulations to see if they changed anything.

Well, looking at the amendments made to the regulations after December 31st, 2014, they completely failed to correct that specific article to align with the current law. It’s a mess. Honestly, I have no clue what the move is here, but the folks over at Sinesys dropped the R-2 entirely starting January 1st, 2015, and switched to just stating "calculation based on paid consideration."

So, basically, am I right to be pushing back? Am I correct in thinking that I don't actually need to clutter my invoices by citing which specific section of the VAT Act justifies the "calculation based on paid consideration" note I've included? 😠🙂

I’ve been digging through RRIF 6-2016, and I am losing my mind here. According to Article 197, Paragraph 4 of the sales tax regulations, small business owners are supposed to include an "R-2" designation on their receipts?! Wait a second—wasn't that requirement scrapped back on January 1st, 2015? Why on earth is it still sitting there in the regulations? It makes zero sense. We have a total standoff where the Law says one thing, but the regulations say another! What are we even supposed to follow?! 🤔
Nicole Lee6, my Synesis software hasn't been printing the R-2 designation on my invoices for a while now...

And does it suffice if the invoice just states "Calculation based on collected fees"
or am I legally required to cite the specific statute—you know, explicitly stating something like "In accordance with the provisions of Section 125, Paragraph 5 of the Sales Tax Act, the tax is calculated based on collected fees."

casualorca5 said:Yes, and even the notary fees...

Thanks!

So, regarding these small subsidies—like when they refund the costs for passing a certification exam—should I be counting that under the "Income" section of my KPIs?

And if those costs are being fully reimbursed, am I still allowed to list them under "Education Expenses" on my tax return, or does that throw everything out of whack?

When a small business owner buys a personal vehicle from an individual, does that specific tax they have to pay get rolled directly into the car's acquisition value (when filling out the DI form)?

Does anyone here actually have a subscription to Reddit? I’m hunting down a specific article from the June 2016 issue—it's regarding real estate services under Section 19 of the Law. Any help would be much appreciated, thanks!

Keith Martinez5 said:The reason I'm asking is mainly about my upcoming tax filing and that PPPI form—which, let's be real, definitely won't align with my numbers for this year. I'm just waiting to hear back from the local Police Department regarding some inquiries. According to their logic, you're supposed to have documentation to cover every single cent moving through your existing business checking account; plus, interest is paid directly out of the account without being officially recorded. To me, this whole setup feels pretty nonsensical for a small business owner. As has been mentioned several times on this forum already, once all the business obligations are met, the money sitting in that existing business checking account actually belongs to the owner, not the entity itself. As long as the bills are paid, what I do with my own capital should be my business... at least, that's how I see it, but life isn't always that simple...

Since when does it matter what leaves the business account? What matters is what comes in, because that's what determines your tax liability. If money goes out and you haven't booked it as a business expense, the government actually wins because you end up paying higher taxes. An entrepreneur can certainly pay for personal expenses out of the business account, and obviously, those won't be listed in the KPI.🤔

graniterider10 said:Like I mentioned before, you need to get the Agreement notarized... make sure you have all three copies, because you'll need to take one of them to the IRS.
What else? Honestly, everything is changing. I think the only thing staying the same is the existing business checking account. Everything else is being updated to the new owner's name, and actually... you don't really gain anything from this transfer. The only thing is, maybe closing it down will be complicated... I don't know. Just make sure you don't cancel your dad's certificates right away, because you're still going to need them for a while to file forms under his SSN.

Oh wow, nobody mentioned that to me 🙂. The folks at the bank and the IRS told me to just show up with the transfer resolution from the Secretary of State's office; they didn't say a word about an Agreement. I'll double-check everything and let you know once it's all finalized and how the whole process went 😁 🤦 thanks!

Keith Martinez5 said:Regarding my membership fees for the tourism board, I’ve ended up with $0.47 some interest charges... How should I be booking those? Is it okay to list them as expenses outside of the KPI? (Sinesys)
Thanks!

Honestly, I haven't been recording those because there wasn't a specific key to use outside of the KPI 😬 and frankly, I don't think I'm going to start now.

graniterider10 said:You go to a notary to handle the transfer of the business entity, and then you submit a copy to the IRS so they can see exactly what assets the new small business owner is taking over, including🙏liabilities, outstanding debts... I need to dig through my paperwork to see exactly how it's worded, then I'll get back to you.
The registration for the business goes through the local Chamber of Commerce..

That works, sounds good. We can just move this over to DMs so we don't clutter up the main thread.😁

graniterider10 said:Yeah, honestly, doing it on January 1st is probably the best way to go. That's exactly how I handled transitioning my mom's business over to my name. The whole process is a massive headache. You have to execute a full transfer of the business entity and get everything notarized. If you want the nitty-gritty details, I can walk you through it. Even if the employer identification number stays the same, since the business is tied to a specific individual, a new owner means a brand-new EIN... so basically, everything is new. New certificates, everything. Even though the bank account might stay the same, you still have to update all the registration data. It's a total reset because, at the end of the day, it really is a brand-new business.

Notarize it? What does that actually entail? Why isn't this just filed directly with the IRS or the Secretary of State's office where they issue the official rulings?

Is it actually permissible to apply the 70/30 rule to the registration costs of a personal vehicle when filing business expenses? This specific car is listed on my asset register, yet it isn't used for my primary registered activities. Furthermore, I don't maintain a mileage log that would indisputably prove the entire mileage of the vehicle is strictly for business purposes. Or should I just leave it out of my KPI entirely?

Does the online retirement portal actually process applications on Saturdays?

Henry Edwards33 said:You basically start a brand new entity with its own unique ID and a fresh sequence starting at 😉
.

$23 In plain English, you just write off the difference. Once you get the statement from the processor, you record the $23 as a merchant processing fee under your expenses.

Since I work over at Silicon Valley, my setup involves several different modules—turnover, sales, auto repair, and a few other things. What I'm looking at isn't just continuing to operate within the same general ledger I'm using right now. No, what I actually need to do is close out the current books entirely, then migrate all the closing balances for inventory, accounts receivable, and accounts payable into a brand-new set of books. This new entity is being opened for the son taking over the father's business. On top of that, I'll have to upload a new tax compliance certificate (which means drafting a new tax authorization act along with about a hundred other tedious administrative headaches...).

Would it be more efficient to handle this transition during the off-season rather than mid-year? Specifically, wait until the father officially retires on December 31st, so everything can transition seamlessly to the son on January 1st?

Has anyone here ever dealt with transferring business turnover from a father to a son specifically because the old man is heading into retirement?

If we pull this off within the same fiscal year, do we actually get to continue the existing sequence of invoice numbers, or am I going to have to start all over again at number 1?

Keith Martinez5 said:Exactly! That is precisely what they tell me too—that the "only correct way" is to deposit the cash and then immediately withdraw it under the guise of material expenses. Now, look, I agree that you don't necessarily need to run a full-blown petty cash fund, but the regulations state you are still required to maintain a record of daily sales—though, in my mind, that should just be an integrated part of the accounting software, much like any other standard report. So, here's my question: what is the actual, practical difference between a sales journal and a petty cash ledger?

The difference is pretty straightforward: you only record cash receipts in the revenue ledger, whereas the cash drawer log tracks both the inflows and the outflows.

Keith Martinez5 said:So, I’m still wrestling with this whole petty cash issue—we actually touched on this a little while back. Is it actually legal to use the cash sitting in the register—not just today's sales, but the actual float/reserve kept in the drawer—to pay off cash invoices? Last year, I handled things that way, but then some accountants told me, "No way, you can't do that." They insisted we have to deposit the full amount first and then just issue a formal check or withdrawal to cover those expenses. To be honest, it feels like nothing more than a way for the bank to squeeze us for extra fees since they charge commissions on those specific types of withdrawals... it doesn't seem to follow any real logic. I'd love some advice here—has anyone dealt with this before, and if so, how does it look if an auditor comes knocking? Vera Wang mentioned that she uses the register cash for stuff like this, so I'd really appreciate hearing what the rest of you think..

Keith Martinez5 said:Exactly! That is precisely what they tell me too—that the "only correct way" is to deposit the cash and then immediately withdraw it under the guise of material expenses. Now, look, I agree that you don't necessarily need to run a full-blown petty cash fund, but the regulations state you are still required to maintain a record of daily sales—though, in my mind, that should just be an integrated part of the accounting software, much like any other standard report. So, here's my question: what is the actual, practical difference between a sales journal and a petty cash ledger?

Here I am. 😬

In my view, the daily takings should be pulled out at the end of each shift. That "register drawer" should only hold the starting float, while all the actual cash revenue gets moved from that drawer into a separate petty cash fund. From there, I pull the cash out to pay off those various business expense invoices issued under the company name. When we had an audit regarding our fiscal compliance, I actually asked if this workflow was acceptable. They told me that as long as the daily receipts are kept together in one register, it’s perfectly fine—provided that the petty cash is kept in a physically separate location from the main register. 🤷

When I’m handling invoices for services provided within the EU, I run everything through the Sales module. I've already gone ahead and set up all my specific keys for VAT exemptions—especially for those EU transactions and when dealing with third countries—so the VAT return and the aggregate reports just pull that data automatically. Now, if a client decides to make things difficult and demands an invoice shown entirely in USD—which happens quite a bit with my clients over in Canada, for instance—I don't let it mess up my books. I just take that same invoice, retype it into Excel, and send that version over to them. Meanwhile, I keep the original version from the Sales module recorded in USD, though I always make sure to include a note on the document stating the conversion rate used based on the daily Federal Reserve mid-market rate at the time of issuance.

Keith Martinez5 said:Can someone please walk me through what I should do with the cash left in the register from December 31, 2015? Technically, it’s my opening balance for January 1, 2016, but does that need to be documented somewhere on that dreaded IRS filing form? Things are a complete mess on my end—I had some bills paid during 2015 that I totally overlooked, so I ended up recording them on January 2, 2016. Of course, they show up in the bank statements for 2015, so now I’m worried—is the IRS going to throw the book at me or shut down my business in Brooklyn over this? It's impossible for me to fix the past entries now, because they’re already sitting there in January as income, and naturally, I paid sales tax on them... just a bit late. As for the petty cash, from what I’m reading here, I do keep track of all my deposit and withdrawal slips, but it sounds like I shouldn't have been paying cash bills directly out of the register. That’s what I was doing—it seemed like the most logical move since it's my own money (and honestly, I would’ve gone through so much trouble just to save a few bucks), but apparently, you're supposed to record the entire day's revenue as a deposit first, and then withdraw the specific amount needed for cash expenses... Please correct me if I've misunderstood everything again. My brain is basically mush right now...

Look, let’s be clear about how this works. I deal with cash receipts all the time—for instance, when I’m picking up fuel for my small business, they hand me a receipt made out to the company. Naturally, I’m going to settle that using the petty cash on hand. That is precisely why I maintain a cash fund in the first place. It’s just basic bookkeeping. $1667 You can definitely pay in cash. What I usually do is take that surplus—you know, when you hit that amount over the register limit—and deposit it directly into the petty cash till. That way, if there isn't a specific cash account active that day to absorb the excess, I don't run the risk of it just sitting there or getting mismanaged. Once it's accounted for, I just take the balance down to Chase. $3333 I’ve decided that I’m just going to set my own cash limit for the register and call it a day. Honestly, I'm not dragging all that extra cash down to the bank every single time; it’s just not worth the hassle.

Charles Turner13 says: "I’ve been sitting here staring at this mess for an hour, trying to make sense of it, and frankly, I’m more frustrated than when I started. It feels like every time we think we have a handle on the situation, some new layer of incompetence surfaces. It's exhausting."

amberbadger17 said:So, here’s the plan: I’ll take whatever leftover cash was sitting there from 2015 and dump it all in one go during 2016. I'll just note on the slip that it’s the carryover from last year, then we can slot that amount under the 2.5 PPI when we tackle the 2016 tax filings.

And honestly? I am totally rejecting this whole "cash register" argument. As a small business owner, I *am* the cash register. Period. I swear, if anyone tries to push any other interpretation on me, I’ll just hand them my lawyer's phone number. I’d much rather pay him than deal with some local bureaucrats who wouldn't know hard work if it hit them in the face.

Anyway, sorry for the rant—I know I'm sounding a bit wound up. Long story short, if they come knocking about the register, I'll just whip up a spreadsheet based on the KPI, adjusted for the deposits. But there is zero chance in hell I'm documenting every single inflow and outflow until they actually write it into an official federal regulation or something.

Catch ya later, folks.

I feel like my brain is short-circuiting here; I honestly can't wrap my head around what you just wrote. 🤔 Where exactly are you planning on depositing that amount? If you drop it in all at once like that, it just sits there in the register as my opening balance. As far as I'm concerned, if my opening balance for 2016 matches the closing balance from 2015, everything is squared away. That’s more than enough for me. 🤷

Charles Turner13 said:The safest bet would be to file an amendment and record those 2015 expenses in 2015. I know, you'd have to file a VAT amendment, but it's better than dealing with a headache down the road.
Maybe I wasn't clear regarding how I handle the cash logs; I don't maintain them like a major corporation would, but I did set up an Excel spreadsheet to track cash inflows and outflows, labeling the columns "deposits" and "withdrawals." Every cash receipt is a deposit, and every cash payout or cash deposit is a withdrawal.
I actually give this spreadsheet to my clients to manage, and they send it back to me at the end of the month for me to double-check.
Some people keep these exact same records in a standard A4 notebook, which is what the IRS suggested in one of their publications when electronic filing was first implemented.
Based on that same spreadsheet, at the end of the year, I total all the deposits and withdrawals to find the cash balance—essentially an overview of unspent and undeposited cash—and then I submit those records to the Police Department along with the HHS. My year-end balance becomes my starting cash balance for the following year.
Everyone has their own workflow, and everyone finds what works best for them.

I actually do something pretty similar. I set up an Excel spreadsheet that mirrors our standard cash report—though I just leave out that bottom section regarding the petty cash vouchers 😬. But here’s my headache: I end up manually printing out a receipt for every single deposit or withdrawal 🙂. Does this mean I can just scrap the whole manual receipt process and strictly stick to maintaining the cash report? 🙂

In my experience, I’ve never actually had to submit a final cash balance to the Police Department. They’ve never once asked me for documentation regarding unspent or unfiled cash 🤷. My method is simple: I just take the closing balance from December 31st, 2015, and plug it in as the opening balance for January 1st, 2016. At the bottom of the monthly cash report, right under the total turnover, I have a field for the balance from December 31st, 2015. That figure gets added to the current January activity to give me the balance for January 31st, 2016. Then, that exact amount rolls over directly into the February report, sitting in that same spot under the turnover field 🕺