Separating taxable from non-taxable items on invoice

Invoicing & Payments for Service Professionals
1

Just wrapped up a project with mixed services - some taxable, some not. Now I’m staring at my invoice template, scratching my head. How do you folks handle this? Separate line items? Different sections? I want to make it clear for the client and keep my books straight.

2

Split the invoice in two: taxable and non-taxable. List each item under the right section. Add up each part separately. Only tax the taxable stuff. Put the total at the bottom.

Keep it simple. Clients get it, and it’s easier for you come tax time.

One thing: put a quick note saying why some things are taxed and others aren’t. Saves headaches later.

I use QuickBooks. Does this easily and tracks it all for me. Worth the money if you’re dealing with this often.

3

I’ve been in this boat before. Here’s what works for me:

I split my invoice into two parts: taxable and non-taxable.

Each service gets its own line under the right section. I total up each part separately.

Then I only add tax to the taxable stuff.

At the bottom, I put the grand total.

It keeps things clear for my clients and makes my life easier when I’m doing the books.

One thing I learned the hard way: explain why some things are taxed and others aren’t. Just a quick note. Saves a lot of back-and-forth later.

I use Wave for my invoices now. It handles this split pretty well, and it’s free. Might be worth a look if you’re doing this often.

4

Huh never had to deal with that kind of stuff.

I just write down what I did and the price.

5

I just lump everything together on my invoices. Never had any complaints.

Might be different for you though. Maybe ask your accountant if you’re worried about it.

6

I keep it simple. Two sections on the invoice: taxable and non-taxable.

List each item separately. Add tax only to the taxable part.

It’s clear for clients and easy for bookkeeping. No confusion when tax time rolls around.

Just make sure your invoice template can handle this setup.

7

Been there, done that. Here’s how I handle it:

  1. Split the invoice into two main sections:

    • Taxable items
    • Non-taxable items

  2. List each service as a separate line item under the right section

  3. Subtotal each section

  4. Add tax only to the taxable subtotal

  5. Grand total at the bottom

Makes it super clear for clients and keeps my bookkeeping smooth. Plus, it’s a lifesaver come tax time.

Pro tip: Include a brief note explaining why some items are taxed and others aren’t. Saves a bunch of questions later.