Posts by Bradley Sanders3

amberbadger17 said:Look, if you aren't part of the VAT system, don't bother using the R2 code—which basically means you're just a sole proprietor filing income tax—and like you already mentioned, just add a note saying you're not in the system.

Here’s how it breaks down: R1 is for corporations like an LLC or anyone paying corporate tax;
R2 is for those independent contractors or small business owners filing under individual income tax...

...and the big kicker between the two is that the first group has to pay sales tax on invoices even if they haven't been paid yet, whereas the second group only deals with it once the cash actually hits their account.

Just a heads up though, if your total revenue for the year climbs above $76667, the law basically forces your hand and you have to join the VAT system.

So, do I still need to include standard fine print in my notes,
"Late payments are subject to statutory interest."
"In the event of a dispute, the venue shall be the courts in Washington, D.C."
Or is all that unnecessary since I'll be collecting payment upfront?

Hi there,

I’m looking for some clarity. Once I launch my small business and opt out of the sales tax system for the first year, what kind of invoices am I supposed to be sending out—the simplified version or the full itemized ones—and what's the actual distinction? I already know I need to include a note at the bottom stating that I'm not registered for sales tax.
What’s the specific revenue threshold before I'm legally required to start collecting sales tax and join the system?