Guidelines To Run A Successful Business With Tax Invoice

Guidelines To Run A Successful Business With Tax Invoice



Guidelines to​ Run a​ Successful Business With Tax Invoice
We are all familiar with taxes,​ but up until this very moment you​ probably were unaware that such a​ thing as​ a​ tax invoice existed.
A tax invoice is​ a​ legal document that lists the​ goods and services tax (GST) in​ any given transaction .​
If you​ are a​ business owner,​ it​ is​ important to​ know that you​ have obligations when it​ comes to​ the​ many different tax invoices in​ existence.
In order to​ claim a​ GST credit for supplies totaling more than $50,​ you​ must have a​ tax invoice .​
When you​ supply goods or​ services to​ a​ registered business or​ individual,​ you​ must be able to​ provide a​ tax invoice within 28 days if​ the​ registered business or​ person requests one .​
Failure to​ provide a​ tax invoice when requested can result in​ penalties.
If you​ are a​ business owner,​ claims for supplies that are worth $50 or​ more,​ but no more than $1,​000,​ require you​ to​ have a​ tax invoice in​ order to​ get a​ credit .​
Without a​ tax invoice you​ cannot claim a​ credit when your return is​ due if​ you​ do not have a​ tax invoice .​
However,​ there is​ a​ loophole available if​ you​ find yourself in​ this position .​
To take advantage of​ it​ all that is​ required is​ that you​ still obtain the​ GST for the​ transaction,​ and then claim the​ credit for the​ purchase in​ a​ later return .​
In this case,​ a​ simplified tax invoice is​ acceptable,​ but the​ tax invoice must clearly show the​ words ‘tax invoice’ in​ a​ prominent place,​ the​ name and GST number of​ the​ supplier,​ the​ date that it​ was issued,​ a​ description of​ the​ goods or​ services that were supplied,​ and the​ total amount that is​ payable,​ as​ well as​ a​ statement that the​ GST is​ included.
For supplies or​ services less than $50,​ no tax invoice is​ needed .​
However,​ it​ is​ important you​ still keep a​ record of​ such items as​ invoices,​ vouchers or​ receipts for these purchases .​
Though a​ problem is​ most likely to​ never arise,​ you​ should try and keep a​ minimum amount of​ documentation just to​ be safe .​
Nobody likes the​ idea of​ an​ IRS audit,​ especially when you​ can’t provide requested documentation.
When dealing with supplies worth $1,​000 or​ more,​ the​ process of​ claiming a​ credit is​ a​ little more involved .​
The tax invoice must clearly display the​ following: the​ words ‘tax invoice’; the​ GST number; the​ name,​ or​ trade name; the​ name and address of​ the​ recipient; the​ date it​ was issued; the​ quantity of​ the​ goods or​ services supplied; and a​ description of​ the​ goods or​ services.
The invoice should also include the​ amount (excluding the​ tax) that was charged for the​ supply or​ service,​ the​ GST content and the​ total amount paid for the​ supply .​
If you​ don’t have this information,​ then the​ invoice must include a​ statement to​ the​ effect that the​ GST was included in​ the​ final price .​
It should also be noted that if​ the​ tax invoice covers multiple supplies or​ services totaling $1,​000 or​ more,​ then all the​ details listed above are required for each supply or​ service.
The helpful descriptions provided here can be the​ difference between an​ IRS audit and a​ thriving business .​
This is​ especially true for many small business owners who may not have all of​ the​ resources most of​ the​ big corporations have at​ their disposal .​
In a​ society where the​ tax code grows more and more convoluted each year,​ it​ is​ in​ the​ best interests of​ small businesses to​ have a​ firm grasp of​ these rules and procedures.




You Might Also Like:




No comments:

Powered by Blogger.