How can I calculate the input tax correctly?
April 14, 2022 | 40,00 EUR | answered by Roberta Schlattmann
Dear Sir or Madam,
my name is Sophia Klett and I run a small business in the field of online marketing products. Lately, I have been having difficulties calculating my input tax. I simply do not understand how to correctly calculate the input tax and I am worried that I may be making mistakes that could lead to problems with the tax office.
Currently, I keep track of my income and expenses and have collected all my invoices and receipts. However, I am still unsure how to accurately calculate and record the input tax from these documents.
I wonder if I may have treated certain expenses incorrectly and if there are specific calculation methods that could help me determine the input tax correctly. Should I also consider certain special cases?
I would be very grateful if you could help me in my situation and explain to me how to correctly calculate the input tax in my case. Are there specific steps or tips you could provide me with to ensure that I do not make any mistakes? I would like to handle everything correctly and in an orderly manner to avoid potential issues with the tax office.
Thank you in advance for your assistance.
Sincerely,
Sophia Klett
Dear Mrs. Klett,
Thank you for your inquiry regarding the calculation of your input tax. I understand that this can be a complex issue and it is important to correctly determine the input tax in order to avoid potential problems with the tax office.
First of all, it is important to understand what input tax actually is. Input tax is the value-added tax that you, as a business owner, pay for your operational expenses. You can deduct this input tax from the value-added tax liability that you calculate on your own sales. This way, the value-added tax is only calculated on the net amount, as the input tax has already been taken into account.
To calculate the input tax correctly, you must first ensure that you have carefully documented all invoices and receipts for your operational expenses. This includes invoices for office supplies, rent, advertising costs, etc.
When calculating the input tax, you must ensure that you are only allowed to deduct the input tax from operational expenses. Private expenses are excluded from the input tax deduction. In addition, the expenses must be related to taxable sales, as only for these can the input tax be claimed.
There are different methods to calculate the input tax, such as the cash or accrual method. With the cash method, the value-added tax is only deducted when it has actually been paid. With the accrual method, on the other hand, the value-added tax is deducted as soon as the invoice is issued.
It is important that you choose the method that is suitable for your business and consistently apply it. I also recommend that you regularly review your bookkeeping and consult with a tax advisor if necessary to ensure that you are recording everything correctly.
I hope this information helps you and that you can now calculate the input tax more effectively. If you have any further questions, please do not hesitate to contact me.
Best regards,
Roberta Schlattmann
