Invoice validation for the IRS, New York
We are aware we are not yet up to the IRS, but it is never too early to remember to validate invoices. It is better to go about doing this tedious task all the way through the year than to leave everything until the last minute, right? Therefore, in this article, how you can start preparing now for the 2020 IRS and also what happens if you don’t validate invoices will be explained.
By having your invoices validated correctly, you will benefit from deductions in health, education, housing, homes and even general family expenses that assume the designation “Others”.
You can also regain part of the VAT incurred in expenses with transportation passes, accommodation and catering, car and motorcycle workshops, hairdressers and beauty institutes and even veterinarians.
Nowadays, most invoices are automatically validated by the system according to the sector to which it belongs, however it is essential to take into account that there are invoices that need manual validation and that there are deadlines for doing so.
So that you don’t miss any of its benefits, in this article it will be explained how you can validate invoices in a very easy way
How to validate invoices
Invoices can be validated in the following ways:
Registration on the Finance Portal
To validate invoices you must be registered on the Finance Portal. If you are a beginner, you must register and wait for the password to be sent to your address. If you have already registered, make sure you have your data (TIN and password) to access the Portal.
Access e-Invoice
The next step is to access the e-Invoice home page and enter the “IRS deductible expenses” menu. Then, you must click on the green button which says “Consumer” and insert the password sent by Finance (the same one you use to enter the Portal).
After accessing the consumer area, you will find the amount referring to what you have already accumulated with the expenses associated with your taxpayer number, by sector. It may be advantageous to check this area during the year, as this is where you can get a sense of how much you have accumulated by category and thus know if you have reached the maximum deduction or how much you need to achieve.
Validate pending invoices
If you have invoices pending for verification, the portal will give you that indication. To proceed with its validation, just click on the “Complementary Invoice Information” button, where you will find the expenses entered by merchants who have multiple activities.
It may happen that you do not recognize the name of the establishment or that you do not remember the expenses incurred on the date indicated. In this case, we advise you to look for paper invoices or search for the name or address of the entity in a search engine.
If you make a mistake in associating the category or if you detect an invoice inserted in the wrong sector, don’t worry: just select it and click on “Change” to relate it with the category to which it belongs.
Associate a prescription
If you have invoices that consist of health expenses with a VAT rate of 23%, the portal will alert you. To proceed with this deduction you will have to click on “Associate Prescription” and indicate if you have a medical prescription, as well as the amount of the expense that is covered by it.
Enter invoices manually
It may happen that, in a hurry, you forgot to ask for an invoice with a taxpayer number for a relevant expense.
If you notice the absence of this expense, you can enter it manually. Just enter the “Invoices” menu, go to “Register Invoices” and fill in the missing fields: trader’s tax number, invoice type and number, date of issue, VAT rate and taxable base (amount excluding VAT).
Self-employed workers
Self-employed workers with open activity (commercial or services) must specify, for each invoice, whether the total amount or only a part of it was spent within the scope of professional activity.
In the case of the total amount, the expense is considered to be 100%, whereas, in the case of a partial expense, the Tax Authority only takes into account 25% of the value.
As of 2019, the Tax Authority assumes that only 10% of income under the simplified regime is spent on professional activity, unlike what happened until 2018, in which it assumed that 25% of income on the same regime was spent on the profession.
Therefore, the taxpayer is currently required to prove additional deductions to make up the remaining 15% of expenses related to the profession.
For self-employed workers with income in category B above 27,360 dollars this validation is especially essential, as they can lose a considerable amount of money if they do not correctly validate their professional expenses.
Confirm validation
It may be beneficial to access the e-Invoice with some regularity in order to verify that all invoices are being inserted correctly and in accordance with the respective sector. Also pay attention to the IRS 2020 deadlines to make sure you have all invoices in order to be delivered within the stipulated deadline.